UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
                            -------------------------

         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                         Commission File Number 0-26876

                            OAK HILL FINANCIAL, INC.
             (Exact name of registrant as specified in its charter)

                  Ohio                                         31-1010517
        (State or jurisdiction of                           (I.R.S. Employer
     incorporation or organization)                      Identification Number)

              14621 S.R. 93
               Jackson, OH                                        45640
(Address of principal executive offices)                       (Zip Code)

       Registrant's telephone number, including area code: (740) 286-3283
                            -------------------------

                Securities pursuant to Section 12(b) of the Act:
                                      None
           Securities registered pursuant to Section 12(g) of the Act:
                         Common stock without par value

     Check whether the registrant (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. Yes X No ____

     Check  if  disclosure  of  delinquent  filers  in  response  to Item 405 of
Regulation  S-K is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the best of the  registrant's  knowledge,  in definitive proxy or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]

     The aggregate  market value of the voting stock held by  non-affiliates  of
the  registrant  computed by  reference  to the sales price of the last trade of
such stock was $48,693,343.13 on March 13, 2001.

     There were 5,097,631  shares of the registrant' s common stock  outstanding
at March 13, 2001.


                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the  Registrant's  Annual Report to  Stockholders  for the year
ended December 31, 2000 are incorporated by reference into Part II and IV.

     Portions of the proxy statement dated March 13, 2001 for the Annual Meeting
of  Stockholders  to be held April 25, 2001 are  incorporated by reference in to
Part III.







                                      -1-

<PAGE>
                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                            Page

                                     Part I
<S>              <C>                                                                                        <C>
Item 1.       Business                                                                                        3

Item 2.       Properties                                                                                     16

Item 3.       Legal Proceedings                                                                              16

Item 4.       Submission of Matters to a Vote of Security Holders                                            16

                                     Part II

Item 5.       Market for Registrant's Common Equity and Related Stockholder Matters                          17

Item 6.       Selected Financial Data                                                                        18

Item 7.       Management's Discussion and Analysis of Financial Condition and Results of Operations          20

Item 7A.      Quantitative and Qualitative Disclosures About Market Risk                                     26

Item 8.       Financial Statements and Supplementary Data                                                    26

Item 9.       Changes in and Disagreements With Accountants on Accounting and Financial Disclosure           26

                                    Part III

Item 10.      Directors and Executive Officers of the Registrant                                             26

Item 11.      Executive Compensation                                                                         26

Item 12.      Security Ownership of Certain Beneficial Owners and Management                                 26

Item 13.      Certain Relationships and Related Transactions                                                 26

                                     Part IV

Item 14.      Exhibits, Financial Statement Schedules, and Reports on Form 8-K                               26

Signatures                                                                                                   28

</TABLE>













                                      -2-
<PAGE>
                                     PART I

Item 1.  Business.

Oak Hill Financial, Inc.

         Oak Hill Financial, Inc., an Ohio corporation (the "Company") formed in
1981, is a bank holding company registered under the Bank Holding Company Act of
1956,  as amended  (the  "Act"),  and is subject to  regulation  by the  Federal
Reserve Board. The Company is a multi-bank holding company as defined in the Act
and is  registered  as such with the Board of Governors  of the Federal  Reserve
System. The Company engages indirectly in the business of commercial banking and
other  permissible  activities  closely related to banking and consumer  finance
lending  through three wholly owned  subsidiaries,  Oak Hill Banks ("Oak Hill"),
Towne  Bank  ("Towne"),  (collectively,  hereinafter  the  "Banks"),  and Action
Finance Company ("Action"). The Company provides management and similar services
for the Banks and Action.  Since it does not conduct  any  operating  businesses
itself,  the Company must depend  largely upon its  subsidiaries  for funds with
which to pay the expenses of its operation  and, to the extent  applicable,  any
dividends on its outstanding shares of stock. For further information,  see Note
A of the Notes to Consolidated  Financial  Statements appearing in the Company's
Annual Report to Stockholders, which is incorporated by reference in response to
this item.

         The Company faces strong  competition from both banking and non-banking
institutions.  Its banking competitors include local and regional banks and bank
holding companies,  as well as some of the largest banking  organizations in the
United  States.  In  addition,  other types of financial  institutions,  such as
savings and loan  associations  and credit unions offer a wide range of loan and
deposit services that are directly  competitive with those offered by the Banks.
The  consumer is also served by  brokerage  firms and mutual  funds that provide
checking services,  credit cards, and other services similar to those offered by
the Banks.  Major stores  compete for loans by offering  credit cards and retail
installment  contracts.  It is anticipated  that  competition  from non-bank and
non-savings and loan organizations will continue to grow.

         The range of services  provided by the Company's  subsidiaries to their
customers includes  commercial  lending,  real estate lending,  consumer credit,
credit  card,  and  other  personal  loan  financing.  Each of the  subsidiaries
operates  under the  direction  of a Board of Directors  and  officers  that are
separate from the Company.

Lending Activities

         General. The Company generally makes loans in southern and central Ohio
where its branches are located.  The Company's  principal lending activities are
the origination of (i) conventional  one-to-four  family  residential loans, and
(ii) commercial  loans,  most of which are secured by real estate located in the
Company's primary market area. These loan categories accounted for approximately
86% of the Company's loan portfolio at December 31, 2000. The Company also makes
consumer loans,  including  installment loans and second  mortgages,  and offers
credit cards.

         Loan Portfolio Composition and Activity. The following table sets forth
the  composition  of the  Company's  loan  portfolio  in dollar  amounts  and in
percentages  for each of the last five  years,  along with a  reconciliation  to
loans receivable, net of the allowance for loan losses.
<TABLE>
<CAPTION>
                                                                      At December 31,
                                   2000                 1999                 1998                 1997                 1996
                                   ----                 ----                 ----                 ----                 ----
                           Amount     Percent     Amount    Percent    Amount     Percent    Amount    Percent    Amount    Percent
                           ------     -------     ------    -------    ------     -------    ------    -------    ------    -------
                                                                      (Dollars in thousands)
<S>                         <C>          <C>       <C>         <C>      <C>         <C>       <C>         <C>      <C>         <C>
Type of loan:

  1-4 family
    residential loans     $240,593       40.1%   $223,365      44.0%   $179,972      43.8%   $172,214     47.7%   $144,185     48.4%

  Commercial and other
    loans                  275,500       46.0     215,205      42.3     170,579      41.5     143,027     39.6     112,543     37.8

  Consumer loans            88,585       14.8      74,045      14.6      63,873      15.5      48,196     13.4      43,216     14.5

  Credit cards               1,605        0.3       1,486       0.3       1,405       0.3       1,360      0.4       1,111      0.4
                           -------      -----     -------     -----     -------     -----     -------    -----     -------    -----

Total loans                606,283      101.2     514,101     101.2     415,829     101.1     364,797    101.1     301,055    101.1

Less:
   Allowance for loan
     losses                 (7,197)      (1.2)     (6,132)     (1.2)     (4,583)     (1.1)     (4,000)    (1.1)     (3,169)    (1.1)
                           -------      -----     -------     -----     -------     -----     -------    -----     -------    -----

Total loans receivable,
  net                     $599,086      100.0%   $507,969     100.0%   $411,246     100.0%   $360,797    100.0%   $297,886    100.0%
                           =======      =====     =======     =====     =======     =====     =======    =====     =======    =====
</TABLE>




                                      -3-
<PAGE>
         The following is maturity  information with respect to commercial loans
at December 31, 2000.
<TABLE>
<CAPTION>

                                 After one year              After five years
 Less than one year            through five years           through ten years             After ten years
 ------------------            ------------------           -----------------             ---------------
            Weighted                     Weighted                     Weighted                     Weighted
            Average                      Average                      Average                      Average
  Amount     Yield              Amount    Yield              Amount    Yield              Amount    Yield              Total
  ------     -----              ------    -----              ------    -----              ------    -----              -----
                                                          (Dollars in thousands)
<S>            <C>                <C>       <C>               <C>        <C>              <C>          <C>              <C>
$70,988       9.23%            $34,536     9.10%            $39,664     8.95%            $130,311     8.85%           $275,500
</TABLE>


         Loans Secured by One- to Four-Family Real Estate. A significant portion
of the Company's  lending activity is the origination of permanent  conventional
loans  secured by  one-to-four-family  residences  located  within the Company's
primary market area. The Company  typically makes adjustable rate mortgage loans
and holds the loans in portfolio.  More than 47% of the  Company's  portfolio of
permanent  conventional  mortgage loans secured by one-to-four family residences
are  adjustable  rate.  The Company  also  underwrites  fixed rate,  residential
mortgage loans,  and may sell those loans in the secondary market to the Federal
Home Loan Mortgage  Corporation  ("FHLMC") or to the Federal  National  Mortgage
Association  ("FNMA")  or on a  servicing-released  basis to  another  financial
institution.

         The Company makes fixed rate loans on one- to four-family residences up
to 95% of the value of the real estate and improvements (the  "loan-to-value" or
"LTV") substantially all of which are sold in the secondary market.  Residential
real estate  loans are  offered by the Company for terms of up to 30 years.  The
Company  requires  private  mortgage  insurance  for the amount of such loans in
excess of 80% of the value of the real estate securing such loans.

         The aggregate amount of the Company's  one-to-four  family  residential
real estate loans totaled approximately $240.6 million at December 31, 2000, and
represented  40.1%  of  loans at such  date.  At such  date,  loans  secured  by
residential real estate with outstanding balances of approximately  $594,000, or
0.2%, of its total one-to-four family residential real estate loan balance, were
more than 90 days delinquent or nonaccruing.

         Commercial  Loans.  The Company is also active in  commercial  lending,
primarily to smaller  businesses in the  Company's  primary  market area.  These
loans are typically  secured by commercial real estate and priced in relation to
the  prime  rate.  Such  loans  generally  have  terms  of up to  15  years  and
loan-to-value  ratios of up to 75%. To a much lesser  degree,  the Company  will
also make unsecured commercial loans, which are also typically priced at spreads
to prime and have maturities of up to one year.

         Loan officers review the borrower's financial statements, appraisals of
the collateral,  and other related  documents before  recommending  funding of a
commercial  loan.  The loan officer and the approving  officer or committee then
determines  that  there is  sufficient  income  to cover  this  and  other  loan
payments,  that  the  collateral  is of  adequate  liquidation  value,  that the
applicant  has  a  good  payment  history  and  is  capable  of  performing  the
requirements  of the loan.  Other reviews and analysis are done as  appropriate,
depending upon the complexity of the credit request.

         Although a risk of nonpayment exists with respect to all loans, certain
specific  types of risks are  associated  with  different  types of  loans.  The
primary risks associated with commercial loans are the quality of the borrower's
management and the impact of national and regional economic factors. The Company
mitigates  these risks by  maintaining  a close  working  relationship  with its
borrowers, by obtaining  cross-collateralization  and personal guarantees of its
loans, and by diversification within its loan portfolio.

         Real estate is frequently a material  component of the  collateral  for
the  Company's  loans.  The  expected  source  of  repayment  of these  loans is
generally  the  operations  of the  borrower's  business,  but the  real  estate
provides an additional  measure of security,  particularly  when the property is
owner-occupied. For this reason, real estate is considered additional collateral
on many of the Company's commercial loans.

         Risks  associated  with real  estate  loans  include  fluctuating  land
values, changes in tax policies, and concentration of loans within the Company's
market area. The Company  mitigates these risks by generally  providing loans to
experienced  commercial real estate owners and  developers.  The risk is further
mitigated by the number of commercial  real estate loans made to the user of the
property.

         The  aggregate  amount of the Company's  commercial  loans without real
estate as primary or secondary collateral totaled approximately $81.3 million at

                                      -4-
<PAGE>

December 31, 2000, and  represented  29.5% of commercial  loans at that date. At
such  date,  commercial  loans  that  were  more  than  90  days  delinquent  or
nonaccruing  totaled  approximately  $21,000,  or 0.03% of its  commercial  loan
portfolio.  The  aggregate  amount of the Company's  commercial  loans with real
estate as primary or secondary  collateral was  approximately  $194.2 million at
December 31, 2000, and at such date,  approximately  $1.7 million in outstanding
balances,  or  0.9%  of  such  loans  were  more  than  90  days  delinquent  or
nonaccruing.

         Consumer Loans.   The  Company  offers  several consumer loan products,
including installment loans and credit cards.

         The  Company  has  developed  working  relationships  with  several car
dealerships in its market area, and is able to do some financing of new and used
cars through these  relationships.  The Company generally finances cars that are
seven years old or newer.  These loans generally have fixed rates and maturities
of 36 to 66 months.

         To a  lesser  degree,  the  Company  makes  small  unsecured  loans  to
creditworthy  individuals.  These loans are typically between $2,000 and $5,000,
at fixed rates, with maturities of less than five years. The Company also offers
a home equity loan  product and, as a result of consumer  demand,  a credit card
product to its customers.  Both products are  underwritten to the same standards
as any of the Company's other consumer loan products.

         Loan  officers  underwrite  installment  loan and other  consumer  loan
requests in such a manner to assure compliance with the various  regulations and
the Company's underwriting standards.  The payment history of applicants is very
important on these smaller loans,  and is checked  through  in-house  records as
well as credit bureaus. Normally, collateral, such as an automobile, is taken as
security and the value is checked through the N.A.D.A. book or another valuation
service.  Income must be adequate to cover all monthly  payments  including  the
proposed loan.

         At December 31, 2000,  the Company had  approximately  $90.2 million in
its consumer  loan and credit card  portfolio,  which was 15.1% of the Company's
total loans.  Approximately $583,000 of these loans were over 90 days delinquent
or nonaccruing on that date, which represented 0.6% of the portfolio.

         Loan Solicitation and Processing.  Loan originations are developed from
a number of  sources,  including  continuing  business  with  depositors,  other
borrowers and real estate  developers,  solicitations  by the Company's  lending
staff, and walk-in customers.

         Underwriting  guidelines  for all  branches  and loan  types are set by
senior management at the home office.  Consumer loan processing and underwriting
are  decentralized;   however,  all  other  loans,  including  real  estate  and
commercial loans, are generally processed and underwritten centrally at the home
office. Loan applications generally are processed and underwritten at the branch
level.  Loan officers and branch  managers review the  applications,  as well as
credit bureau  reports,  appraisals,  financial  information,  verifications  of
income,  and  other  documentation   concerning  the  credit-worthiness  of  the
borrower, as applicable to each loan type.

         Branch managers have the authority to approve loans up to $120,000 that
meet  the  underwriting  criteria  set by  management,  and area  managers  have
authority  for amounts up to $300,000.  Any loan greater than  $300,000  must be
approved by senior management.

         Income from  Lending  Activities.  The Company  earns  interest and fee
income from its lending activities. The Company earns fees for originating loans
and for making commitments to originate loans and loan  participations.  Certain
fees, net of origination  costs, are deferred and amortized over the life of the
loan.  The Company also  receives fees related to existing  loans,  such as late
charges.  Income from loan  origination and commitment fees and discounts varies
with the volume and type of loans and commitments  made and with competitive and
economic conditions.  Note A-4 to the Consolidated Financial Statements contains
a discussion of the manner in which fees and income are recognized for financial
reporting purposes.

Nonperforming Loans

         General.  Late  charges on  residential  mortgages  are assessed by the
Company if a payment is not received  either by the 10th day  following  its due
date or 15th day if the loan has been sold in the secondary  market and is being
serviced by the Company.  Late charges on installment loans and commercial loans
are  assessed  by the  Company  if a  payment  is not  received  by the 10th day
following its due date. Any borrower whose payment was not received by this time
is mailed a past due notice. If the loan is still delinquent after a second past
due notice is mailed  (generally  around the 20th day of delinquency),  a branch
employee  will attempt to contact the customer to resolve any problem that might
exist.

         When an advanced stage of  delinquency  appears  (generally  around the
60th day of delinquency) and if repayment cannot be expected within a reasonable

                                      -5-
<PAGE>

amount of time or a repayment  agreement  has not been  reached,  the Banks will
contact an  attorney  and  request  that the  required  30-day  prior  notice of
foreclosure  or  repossession  proceedings  be  prepared  and  delivered  to the
borrower so that, if necessary, foreclosure proceedings may be initiated shortly
after the loan is 90 days delinquent.  Historically, this procedure has aided in
achieving a low level of nonperforming  loans and, as of December 31, 2000, only
$2.9 million or 0.47% of the  Company's  total loan  portfolio  was over 90 days
delinquent  or  nonaccruing.  As of December 31, 2000,  the  Company's  level of
nonperforming assets to total assets was 0.45%.

       If a credit card account becomes 10 days delinquent,  a notice is sent to
the  account  holder  demanding  that the  payment be made to bring the  account
current. Another notice is sent to the cardholder if the account becomes 20 days
delinquent.  If payment is not received within 30 days,  authorization  requests
are denied, a message about the delinquency appears on the cardholder's  account
statement,  and a follow-up  telephone call is made. These telephone  collection
efforts  and account  statement  messages  continue  until the account is deemed
uncollectible.  Legal action is considered  during this time. As of December 31,
2000,  approximately  $26,000 in  outstanding  balances,  or 1.6% of credit card
loans were nonperforming.

       On December 31, 2000,  the Company held $232,000 in real estate and other
repossessed  collateral acquired as a result of foreclosure,  voluntary deed, or
other means.  Such real estate is  classified as "other real estate owned" until
it is sold and is recorded at the lower of cost (the unpaid principal balance at
the date of acquisition  plus foreclosure and other related costs) or fair value
less  estimated  selling  expenses.  Any  subsequent  write-down  is  charged to
expense.  Generally,  unless the property is a  one-to-four  family  residential
dwelling and  well-collateralized,  interest  accrual  ceases in 90 days, but no
later  than the date of  acquisition.  From that  date,  all costs  incurred  in
maintaining  the property are  expensed.  "Other real estate owned" is appraised
during the foreclosure process, prior to the time of acquisition, and losses are
recognized  for the amount by which the book value of the related  mortgage loan
exceeds the estimated net realizable value of the property.

         At December 31, 2000 and 1999,  the Company had  investment in impaired
loans,  as defined  under SFAS No.  114,  totaling  approximately  $695,000  and
$65,000,  respectively.  The Company  maintained  an allowance for credit losses
related to such  impaired  loans of $460,000  and $20,000 for the periods  ended
December 31, 2000 and 1999, respectively.

         The following is a summary of the Company's  loan loss  experience  and
selected ratios for the periods presented.
<TABLE>
<CAPTION>

                                                                  Year Ended December 31,
                                                2000          1999          1998             1997             1996
                                                ----          ----          ----             ----             ----
<S>                                             <C>           <C>            <C>             <C>              <C>
                                                                 (Dollars in thousands)
Allowance for loan losses
  (beginning of period)                      $  6,132      $  4,583      $  4,000         $  3,169         $  2,587
Loans charged off:
  1-4 family residential real estate              219            80           139               22               51
  Multi-family and commercial real estate          37             9             -                -                -
  Commercial and industrial loans                   2           186           180               68               79
  Consumer loans                                1,155           840           510              402              323
                                              -------       -------       -------          -------          -------
      Total loans charged off                   1,413         1,115           829              492              453
                                              -------       -------       -------          -------          -------

Recoveries of loans previously charged off:
  1-4 family residential real estate               20            21             1               45               20
  Multi-family and commercial real estate           3             -             -                -                -
  Commercial and industrial loans                   1             6            15                5                -
  Consumer loans                                  191           205           130              102              136
                                              -------       -------       -------          -------          -------
      Total recoveries                            215           232           146              152              156
                                              -------       -------       -------          -------          -------

Net loans charged off                           1,198           883           683              340              297
Provision for loan losses                       2,263         2,432         1,266            1,171              879
                                              -------       -------       -------          -------          -------
Allowance for losses on loans
     (end of period)                         $  7,197      $  6,132      $  4,583         $  4,000         $  3,169
                                              =======       =======       =======          =======          =======
Loans outstanding:
  Average, net                               $557,038      $449,873      $387,057         $322,807         $268,861
  End of period                              $606,283      $514,101      $415,829         $364,797         $301,055
Ratio of allowance for loan losses to
  loans outstanding at end of period             1.19%         1.19%         1.10%            1.10%            1.05%
Ratio of net charge-offs to average
   loans outstanding                             0.22%         0.20%         0.18%            0.11%            0.11%

</TABLE>

         At December  31,  2000,  1999,  and 1998 the Company had  nonperforming
loans  totaling $2.9  million,  $3.2  million,  and $2.4 million,  respectively.
Interest  income that would have been  recognized if such loans had performed in
accordance with contractual terms totaled approximately $262,000,  $287,000, and
$162,000,  for the years ended December 31, 2000,  1999, and 1998.  There was no
interest income recognized on such loans during any of the periods.

                                      -6-
<PAGE>

         Allowance for Loan Losses.  The amount of the allowance for loan losses
is based on management's  analysis of risks inherent in the various  segments of
the loan  portfolio,  management's  assessment  of known  or  potential  problem
credits which have come to management's attention during the ongoing analysis of
credit quality,  historical loss  experience,  current and anticipated  economic
conditions  and  other  factors.  If  actual  circumstances  and  losses  differ
substantially  from management's  assumptions and estimates,  such allowance for
loan losses may not be sufficient to absorb all future losses,  and net earnings
could be adversely affected. Loan loss estimates are reviewed periodically,  and
adjustments, if any, are reported in earnings in the period in which they become
known.  In addition,  the Company  maintains a portion of the allowance to cover
potential  losses  inherent  in the  portfolio  that have not been  specifically
identified.

       Although management believes that it uses the best information  available
to make such  determinations  and that the allowance for loan losses is adequate
at December 31, 2000, future adjustments to the allowance may be necessary,  and
net earnings could be affected,  if  circumstances  and/or  economic  conditions
differ   substantially   from  the  assumptions   used  in  making  the  initial
determinations.  A  downturn  in the  southern  and  central  Ohio  economy  and
employment levels could result in the Company  experiencing  increased levels of
nonperforming  assets and charge-offs,  increased provisions for loan losses and
reductions in income. Additionally,  various regulatory agencies, as an integral
part of their examination  process,  periodically review the Company's allowance
for loan losses.  Such agencies may require the  recognition of additions to the
allowance  based on their judgment of information  available to them at the time
of their examination.

       The following table summarizes nonperforming assets by category.
<TABLE>
<CAPTION>
                                                               Year Ended December 31,
                                           2000            1999          1998             1997             1996
                                           ----            ----          ----             ----             ----
                                                                 (Dollars in thousands)
<S>                                        <C>             <C>           <C>               <C>              <C>
Real estate:
  Nonaccrual                            $    436       $  1,092       $    371          $    606         $    347
  Past due 90 days or more (1)               158            411            843               608              281
Commercial and industrial loans:
  Nonaccrual                                 205            444            251               143              267
  Past due 90 days or more (1)             1,487            744            596                82               82
Consumer and other:
  Nonaccrual                                 422            320             65               147              221
  Past due 90 days or more (1)               161            176            295               135               52
                                         -------        -------        -------           -------          -------
      Total nonperforming loans            2,869          3,187          2,421             1,721            1,250

Other real estate owned                      232            169             18                 -                -
                                         -------        -------        -------           -------          -------
      Total nonperforming assets        $  3,101       $  3,356       $  2,439          $  1,721         $  1,250
                                         =======        =======        =======           =======          =======

Loans outstanding                       $606,283       $514,101       $415,829          $364,797         $301,055
Allowance for loan losses to
  total loans                               1.19%          1.19%          1.10%             1.10%            1.05%
Nonperforming loans to total loans          0.47           0.62           0.57              0.47             0.42
Nonperforming assets to total assets        0.45           0.56           0.43              0.36             0.31
Allowance for loan losses to
     nonperforming loans                   250.9%         192.4%         191.9%            232.4%           253.5%
</TABLE>

(1)  Represents accruing loans 90 days or more delinquent that are considered by
     management to be well secured and in the process of collection.

        As of December 31, 2000,  the Company had no loans that were included in
the nonaccrual,  past due 90 days or more or restructured categories,  where the
borrowers were  experiencing  potential credit problems that raised doubts as to
the ability of those borrowers to comply with the present loan repayment terms.












                                      -7-
<PAGE>
        Allocation  of  Allowance  for  Losses on  Loans.  The  following  table
presents an analysis of the allocation of the Company's  allowance for losses on
loans at the dates indicated:
<TABLE>
<CAPTION>

                                                                       At December 31,
                                     2000                1999                1998                1997                1996
                                     ----                ----                ----                ----                ----
                                        Percent             Percent             Percent             Percent             Percent
                                        of loans            of loans            of loans            of loans            of loans
                                        in each             in each             in each             in each             in each
                                        category            category            category            category            category
                                        of total            of total            of total            of total            of total
                               Amount    loans     Amount    loans     Amount    loans     Amount    loans     Amount    loans
                               ------    -----     ------    -----     ------    -----     ------    -----     ------    -----
                                                                    (Dollars in thousands)
<S>                              <C>      <C>        <C>       <C>        <C>       <C>      <C>       <C>       <C>       <C>
Balance at end of period
  applicable to:
Residential real estate        $1,211     16.8%    $1,357     22.1%    $  933     20.3%     $  892     22.3%   $  798     25.2%
Commercial real estate          1,295     18.0        921     15.0        711     15.5         544     13.6       450     14.2
Commercial and other loans      1,508     21.0      1,280     20.9      1,048     22.9         809     20.2       668     21.1
Consumer loans                  1,903     26.4      1,263     20.6        906     19.8         721     18.0       467     14.7
Credit cards                       53      0.7         59      1.0         56      1.2          54      1.4        44      1.4
Unallocated                     1,227     17.1      1,252     20.4        929     20.3         980     24.5       742     23.4
                                -----    -----      -----    -----      -----    -----       -----    -----     -----    -----

          Total                $7,197    100.0%    $6,132    100.0%    $4,583    100.0%     $4,000    100.0%   $3,169    100.0%
                                =====    =====      =====    =====      =====    =====       =====    =====     =====    =====
</TABLE>


        Classified  Assets.  The FDIC  regulations on  classification  of assets
require  commercial  banks  to  classify  their  own  assets  and  to  establish
appropriate general and specific allowances for losses,  subject to FDIC review.
These  regulations are designed to encourage  management to evaluate assets on a
case-by-case  basis  and  to  discourage   automatic   classifications.   Assets
classified  as  substandard  or doubtful  must be  evaluated  by  management  to
determine a reasonable  general loss reserve to be included in total capital for
purposes of the Banks' risk-based  capital  requirement,  but excluded from core
capital or tangible capital or in capital under accounting  principles generally
accepted in the United  States of  America.  Assets  classified  as loss must be
either  written off or reserved for by a specific  allowance that is not counted
toward capital for purposes of any of the regulatory capital requirements.

       Investments.   Investment  securities  primarily  satisfy  the  Company's
liquidity needs and provide a return on residual funds after lending activities.
Pursuant to the  Company's  written  investment  policy,  investments  may be in
interest-bearing  deposits,  U.S.  Government  and  agency  obligations,   trust
preferred   securities,    state   and   local   government    obligations   and
government-guaranteed mortgage-backed securities. The Company does not invest in
securities that are rated less than investment grade by a nationally  recognized
statistical rating organization. A goal of the Company's investment policy is to
limit interest rate risk.

       All securities-related  activity is reported to the Board of Directors of
the  Company.  General  changes in  investment  strategy  must be  reviewed  and
approved by the Company's Board of Directors.  The Company's  senior  management
can purchase and sell securities on behalf of the Company in accordance with the
Company's stated investment policy.











                                      -8-
<PAGE>
         The  following  table sets forth the  carrying  value of the  Company's
investment  portfolio as indicated and includes both  investments  designated as
available for sale and those designated as held to maturity.
<TABLE>
<CAPTION>
                                                                                       At December 31,
                                                                  2000              1999             1998              1997
                                                                  ----              ----             ----              ----
                                                                                    (Dollars in thousands)
<S>                                                                <C>               <C>               <C>              <C>
Held-to-maturity:

     U.S. Government and agency obligations                    $     -          $     -             $14,704          $12,604

     Trust preferred securities                                  4,947                -                   -                -
                                                                ------           ------              ------            ------
          Total investment securities held-to-maturity           4,947                -              14,704            12,604


Available-for-sale:

     U.S. Government and agency obligations                     49,277           49,936              75,266            63,849

     State and local government obligations                      7,046            3,402               9,766             3,204
                                                                ------           ------              ------            ------

          Total investment securities available-for-sale        56,323           53,338              85,032            67,053
                                                                ------           ------              ------            ------
          Total investment securities                          $61,270          $53,338             $99,736           $79,657
                                                                ======           ======              ======            ======
</TABLE>


         The following table reflects the maturities of the Company's investment
securities at December 31, 2000.
<TABLE>
<CAPTION>

                                    Due in          Due after one year    Due after five years
                               one year or less     through five years      through ten years     Due after ten years
                               ----------------     ------------------      -----------------     -------------------
                               Amount      Rate      Amount      Rate      Amount       Rate       Amount      Rate          Total
                               ------      ----      ------      ----      ------       ----       ------      ----          -----
<S>                              <C>        <C>        <C>        <C>        <C>         <C>         <C>        <C>           <C>
Held-to-maturity:
  Trust preferred securities  $     -         -      $    -         -     $     -          -      $ 4,947      6.48%       $ 4,947

Available-for-sale:
   U.S. Government and
     agency obligations         6,075      6.07%      4,498      5.99%     13,534       6.33%      25,170      7.42%        49,277

   Municipal obligations          121      4.70%        856      4.66%      1,085       6.02%       4,984      5.25%         7,046
                                -----      ----       -----      ----      ------       ----       ------      ----         ------

Total available-for-sale        6,196      6.05%      5,354      5.78%     14,619       6.31%      30,154      7.21%        56,323
                                -----      ----       -----      ----      ------       ----       ------      ----         ------

Total investment securities    $6,196      6.05%     $5,354      5.78%    $14,619       6.31%      $35,101     7.11%       $61,270
                                =====      ====       =====      ====      ======       ====        ======     ====         ======
</TABLE>


Source of Funds

       Deposit  Accounts.  Savings  deposits are a major source of the Company's
funds.  The Company offers a number of alternatives  for depositors  designed to
attract both  commercial  and regular  consumer  checking and savings  including
regular  and money  market  savings  accounts,  NOW  accounts,  and a variety of
fixed-maturity,  fixed-rate  certificates  with maturities  ranging from 3 to 60
months.  The Company also provides  travelers'  checks,  official checks,  money
orders, ATM services and IRA accounts.








                                      -9-

<PAGE>
       The  distribution of the Company's  deposit  accounts by type and rate is
set forth in the following table.
<TABLE>
<CAPTION>
                                                                      At December 31,
                                                                      ---------------
                                                   2000                    1999                    1998
                                                   ----                    ----                    ----
                                             Amount    Percent       Amount    Percent       Amount    Percent
                                             ------    -------       ------    -------       ------    -------
                                                                   (Dollars in thousands)
<S>                                          <C>          <C>         <C>         <C>          <C>         <C>
          Demand deposit accounts           $45,792        8.1%    $ 42,598        8.7%    $ 39,655        8.5%

          Savings accounts                   40,451        7.2       45,901        9.4       50,842       10.9

          NOW accounts                       33,996        6.0       31,824        6.5       29,622        6.4

          Money market deposit accounts      11,041        2.0       13,039        2.7       13,570        2.9

          Premium investment accounts        47,512        8.5       30,150        6.2       21,012        4.5

          Select investment accounts         14,609        2.6       12,728        2.6       16,456        3.5
                                            -------      -----      -------      -----      -------      -----

          Total transaction accounts        193,401       34.4      176,240       36.1      171,157       36.7

          Certificates of deposit:

               2.00 - 4.99%                  11,838        2.1       86,208       17.6       37,670        8.1
               5.00 - 6.99%                 353,726       62.9      225,869       46.2      255,997       55.0
               7.00 - 8.00%                   3,652        0.6          563        0.1          850        0.2
                                            -------      -----      -------      -----      -------      -----

          Total certificates of deposit     369,216       65.6      312,640       63.9      294,517       63.3
                                            -------      -----      -------      -----      -------      -----

          Total deposits                   $562,617      100.0%    $488,880      100.0%    $465,674      100.0%
                                            =======      =====      =======      =====      =======      =====
</TABLE>


       The following table presents various interest rate categories and certain
information  concerning  maturities of the Company's  certificates of deposit at
December 31, 2000.

<TABLE>
<CAPTION>
                                                                                   One to            Over
                                                                 Within             three            three
              Certificates of Deposit Accounts                  one year            years            years            Total
              --------------------------------                  --------            -----            -----            -----
                                                                                    (Dollars in thousands)
<S>                                                               <C>               <C>               <C>             <C>
4.00% and less                                                 $  1,464           $   412           $    1        $   1,877

4.01% to 5.00%                                                    8,567             1,096              536           10,199

5.01% to 6.00%                                                   46,224            12,704            1,495           60,423

6.01% to 7.00%                                                  263,998            30,112              867          294,977

7.01% to 8.00%                                                    1,132               608                -            1,740
                                                                -------            ------            -----          -------

Total                                                          $321,385           $44,932           $2,899         $369,216
                                                                =======            ======            =====          =======
</TABLE>

       The following  table sets forth the amount of the Company's  certificates
of deposit that are $100,000 or greater, by time remaining until maturity, as of
December 31, 2000.


                        Maturity Period                    Amount
                        ---------------                    ------
                                                       (In thousands)

           Three months or less                           $ 27,630

           Over three months through six months             27,249

           Over six through 12 months                       51,171

           Over 12 months                                   18,358
                                                           -------

                Total                                     $124,408
                                                           =======


                                      -10-
<PAGE>

       Borrowings.  Deposits  and  repayment of loan  principal  are the primary
source of funds for the Company's lending  activities and other general business
purposes.  However, during periods when the supply of lendable funds cannot meet
the demand for loans,  the  Company can obtain  funds  necessary  through  loans
(advances) from the Federal Home Loan Bank ("FHLB") of Cincinnati. Advances from
the FHLB may be on a  secured  or  unsecured  basis  depending  upon a number of
factors,  including  the purpose for which the funds are being  borrowed and the
total of outstanding  advances.  The Company typically utilizes FHLB advances to
fund long-term  fixed rate  commercial  loans and to meet  short-term  liquidity
needs. As of December 31, 2000, the Banks had outstanding FHLB advances totaling
$70.2  million.  See  Note  F  to  the  consolidated  financial  statements  for
additional   information   regarding  FHLB   advances.   The  Company  also  has
arrangements to borrow funds from commercial banks.

         In March 2000,  a Delaware  trust owned by the Company  (the  "Trust"),
issued  $5.0  million  of  mandatorily  redeemable  debt  securities.  The  debt
securities issued by the Trust are included in the Company's regulatory capital,
specifically as a component of Tier I capital.  The subordinated  debentures are
the sole assets of the Trust, and the Company owns all of the common  securities
of the Trust. Interest payments on the debt securities are made semi-annually at
an annual  fixed  interest  rate of 10.875% and are  reported as a component  of
interest  expense on borrowings.  The net proceeds  received by the Company from
the sale of the  debt  securities  were  used for  general  corporate  purposes,
including  repurchasing the Company's common stock and providing general working
capital.

       The following  table sets forth the maximum  amount of the Company's FHLB
advances and other  borrowings  outstanding  at any month end during the periods
shown and the average  aggregate  balances of FHLB advances and other borrowings
for such periods:
<TABLE>
<CAPTION>

                                                                             Year ended December 31,
                                                                             -----------------------
                                                                         2000           1999          1998
                                                                         ----           ----          ----
                                                                              (Dollars in thousands)
<S>                                                                       <C>            <C>           <C>
        Maximum amount outstanding:

             FHLB advances                                              $86,319        $71,147       $36,707
             Junior subordinated debentures                               5,000              -             -
             Other borrowings                                             2,443              -             -
                                                                         ------         ------        ------
                                                                        $93,762        $71,147       $36,707
                                                                         ======         ======        ======
             Average amount of FHLB advances and other borrowings
                  outstanding                                           $72,029        $54,192       $31,661
                                                                         ======         ======        ======

             Weighted-average  interest  rate of total  borrowings
               based on quarter end balances                               6.73%          6.14%         5.88%
</TABLE>

       The following  table sets forth certain  information  as to the Company's
FHLB advances and other borrowings at the dates indicated.

<TABLE>
<CAPTION>

                                                            December 31,
                                                            ------------
                                                  2000           1999          1998
                                                  ----           ----          ----
                                                       (Dollars in thousands)
<S>                                                <C>            <C>           <C>
       FHLB advances                              $70,152       $59,680       $36,458

       Junior subordinated debentures               5,000             -             -

       Other borrowings                             2,443         1,172           955
                                                   ------        ------        ------


            Total borrowings                      $77,595       $60,852       $37,413
                                                   ======        ======        ======
</TABLE>


         Asset and Liability  Management.  Net interest  income,  the difference
between the yield on  interest-earning  assets and the cost of  interest-bearing
liabilities,  is the principal  component of the  Company's  net  earnings.  The
ability  to  maximize  net  interest  income  is  largely   dependent  upon  the
achievement  of a positive  interest  rate spread that can be  sustained  during
fluctuations in prevailing interest rate levels.  Interest rate sensitivity is a
measure  of the  difference  between  amounts  of  interest-earning  assets  and
interest-bearing  liabilities  which  either  reprice  or mature  within a given
period of time. The difference,  or the interest rate repricing "gap",  provides
an  indication  of the extent to which a financial  institution's  interest rate


                                      -11-
<PAGE>

spread will be affected by changes interest rates. A gap is considered  positive
when the  amount  of  interest-rate  sensitive  assets  exceeds  the  amount  of
interest-rate  sensitive  liabilities and is considered negative when the amount
of  interest-sensitive  liabilities  exceeds  the  amount of  interest-sensitive
assets.  Generally,  during a period of rising  interest  rates,  a negative gap
within shorter  maturities would adversely  affect net interest income,  while a
positive  gap within  shorter  maturities  would  result in an  increase  in net
interest  income.  Conversely,  during a period of  falling  interest  rates,  a
negative  gap within  shorter  maturities  would  result in an  increase  in net
interest income,  while a positive gap within shorter  maturities would have the
opposite effect.

         In recognition of the foregoing factors, the Board of Directors of each
of the Banks and  Action  have  implemented  an asset and  liability  management
strategy directed toward improving each entity's interest rate sensitivity.  The
principal  common elements of such  strategies  include (1) meeting the consumer
preference  for  fixed-rate  loans over the past  several  years by selling such
loans in the secondary market,  (2) originating  adjustable-rate  mortgage loans
("ARMs") as demand  increases  coincident with an overall rise in interest rates
in the economy,  (3) maintaining  higher levels of liquid assets,  such as cash,
short-term  interest-earning  deposits and short-term investment securities as a
hedge against rising  interest rates in a lower interest rate  environment,  and
(4) utilizing FHLB advances and longer term  certificates  of deposit as funding
sources when available.

         The  following  table  contains  information  regarding  the amounts of
various  categories  of assets and  liabilities  repricing  within  the  periods
indicated:
<TABLE>
<CAPTION>

December 31, 2000
                                                                 Year Ending December 31,
                                                                                              2005 and
                                              2001         2002        2003         2004        after       Total
                                              ----         ----        ----         ----        -----       -----
<S>                                          <C>          <C>         <C>           <C>          <C>          <C>
Interest-earning assets:
     Federal funds sold                  $      77    $       -   $       -    $       -          $ -    $     77
     Interest-bearing deposits                 365            -           -            -           -          365
     Investment securities                   5,131        2,914       1,374          901       50,950      61,270
     Loans receivable                      129,827       57,740      47,971       26,634      336,914     599,086
     Other interest-earnings assets              -            -           -            -        4,981       4,981
                                          --------     --------    --------     --------      -------     -------
          Total                            135,400       60,654      49,345       27,535      392,845     665,779

Interest-bearing liabilities:
    Deposits                               358,692       94,827      59,717       13,885       35,496     562,617
    Borrowings                              46,657        4,026       6,642        1,543       18,727      77,595
                                          --------     --------    --------     --------      -------     -------
          Total                            405,349       98,853      66,359       15,428       54,223     640,212
                                          --------     --------    --------     --------      -------     -------

Excess (deficiency) of interest rate
  sensitive assets over interest
   sensitive liabilities                 $(269,949)   $ (38,199)  $ (17,014)   $  12,107     $338,622    $ 25,567
                                          ========     ========    ========     ========      =======     =======

Cumulative excess (deficiency) of
  interest sensitive assets over
  interest sensitive liabilities         $(269,949)   $(308,148)  $(325,207)   $(313,055)    $ 25,567    $ 25,567
                                          ========     ========    ========     ========      =======     =======

Cumulative interest rate sensitivity
  gap to total assets                       (38.86)%     (44.36)%    (46.81)%     (45.07)%       3.68%      3.68%
                                            ======       ======      ======       ======         ====       ====
</TABLE>


<TABLE>
<CAPTION>
December 31, 1999
                                                                 Year Ending December 31,
                                                                                              2005 and
                                              2001         2002        2003         2004        after       Total
                                              ----         ----        ----         ----        -----       -----
<S>                                          <C>          <C>         <C>           <C>          <C>          <C>
Interest-earning assets:
     Federal funds sold                  $   3,854    $       -   $       -    $       -     $     -    $   3,854
     Interest-bearing deposits                 662            -           -            -           -          662
     Investment securities                   1,773        4,820       2,194        3,259       41,292      53,338
     Loans receivable                      189,425       54,866      49,336       41,522      172,820     507,969
     Other interest-earnings assets              -            -           -            -        4,079       4,079
                                          --------     --------    --------     --------      -------     -------
          Total                            195,714       59,686      51,530       44,781      218,191     569,902

Interest-bearing liabilities:
    Deposits                               257,134      122,137      55,989       15,828       37,792     488,880
    Borrowings                              22,320       11,127       7,533        1,583       18,289      60,852
                                          --------     --------    --------     --------      -------     -------
          Total                            279,454      133,264      63,522       17,411       56,081     549,732
                                          --------     --------    --------     --------      -------     -------

Excess (deficiency) of interest rate
  sensitive assets over interest
   sensitive liabilities                 $( 83,740)   $ (73,578)  $ (11,992)   $  27,370     $162,110    $ 20,170
                                          ========     ========    ========     ========      =======     =======

Cumulative excess (deficiency) of
  interest sensitive assets over
  interest sensitive liabilities         $( 83,740)   $(157,318)  $(169,310)   $(141,940)    $ 20,170    $ 20,170
                                          ========     ========    ========     ========      =======     =======

Cumulative interest rate sensitivity
  gap to total assets                       (13.95)%     (26.22)%    (28.21)%     (23.65)%       3.36%      3.36%
                                            ======       ======      ======       ======         ====       ====
</TABLE>

                                      -12-
<PAGE>

Personnel

       At December  31,  2000,  the Company and its  subsidiaries  employed  257
persons on a full-time basis and 22 persons on a part-time basis.

Executive Offices

       The  Company's  executive  office is  located  at 14621  State  Route 93,
Jackson, Ohio 45640 and its telephone number is (740) 286-3283.

Subsidiaries

       The Company owns all of the outstanding  stock of Oak Hill Banks, an Ohio
state-chartered  bank,  which was founded in 1902.  The Company  owns all of the
outstanding stock of Action Finance Company, a consumer finance company that was
formed in 1998. The Company owns all of the outstanding  stock of Towne Bank, an
Ohio state-chartered  bank. The Company owns all of the outstanding stock of Oak
Hill Capital Trust I, a Delaware statutory trust that was formed in 2000.

Regulation

       Oak Hill Banks and Towne Bank, as Ohio state-chartered banks, are subject
to  supervision  and regular  examination  by the  Superintendent  of  Financial
Institutions  of the State of Ohio. The Banks are insured by the Federal Deposit
Insurance  Corporation  and are subject to the provisions of the Federal Deposit
Insurance Act. To the extent that the information below consists of summaries of
certain statutes or regulations, it is qualified in its entirety by reference to
the statutory or regulatory provisions described.

       The Company is subject to the provisions of the Bank Holding  Company Act
of 1956,  as amended  (the  "Act"),  which  requires a bank  holding  company to
register under the Act and to be subject to supervision  and  examination by the
Board of Governors of the Federal Reserve System. As a bank holding company, the
Company is required  to file with the Board of  Governors  an annual  report and
such  additional  information as the Board of Governors may require  pursuant to
the Act.  The Act  requires  prior  approval  by the Board of  Governors  of the
acquisition by a bank holding company,  or any subsidiary thereof, of 5% or more
of the  voting  stock or  substantially  all the  assets of any bank  within the
United States.

       As a bank holding  company  located in the State of Ohio,  the Company is
not  permitted  to  acquire a bank or other  financial  institution  located  in
another state unless such acquisition is specifically authorized by the statutes
of such state.  The Act further  provides that the Board of Governors  shall not
approve  any such  acquisition  that would  result in a monopoly  or would be in
furtherance  of any  combination  or  conspiracy  to  monopolize  or  attempt to
monopolize  the  business  of banking in any part of the United  States,  or the
effect  of which  may be to  substantially  lessen  competition  or to  create a
monopoly in any section of the country,  or that in any other manner would be in
restraint  of  trade,  unless  the  anti-competitive  effects  of  the  proposed
transaction are clearly outweighed in the public interest by the probable effect
of the  transaction in meeting the  convenience and needs of the community to be
served.

       The Act also prohibits a bank holding company,  with certain  exceptions,
from  acquiring 5% or more of the voting stock of any company that is not a bank
and from engaging in any business other than banking or performing  services for
its banking  subsidiary  without  the  approval  of the Board of  Governors.  In
addition, the acquisition of a thrift institution must be approved by the Office
of  Thrift  Supervision  pursuant  to  the  savings  and  loan  holding  company
provisions  of the Home  Owners'  Loan  Act of 1933.  On  March  13,  2000,  the
Financial Services Act of 1999, also known as the Gramm-Leach-Bliley Act, became
effective.   This  legislation  repealed  certain   cross-industry   affiliation
prohibitions and made certain other changes to the Act. It authorized a new form
of holding company,  a financial holding company,  which with certain exceptions
is authorized to undertake  activities which are "financial in nature" and which
include banking,  insurance and securities activities.  Generally,  the scope of
activities  permitted  to a financial  holding  company  are broader  than those
previously permitted to a bank holding company. A bank holding company may elect
to become a financial holding company. The Company has not filed such a request.
Under the Act, as amended by the  Gramm-Leach-Bliley  Act, the Company continues
to be permitted to engage in certain  activities,  including  mortgage  banking,
operating small loan companies,  factoring,  furnishing  certain data processing
operations,  holding or operating  properties  used by banking  subsidiaries  or
acquired for such future use, providing certain investment and financial advice,
leasing  (subject to certain  conditions) real or personal  property,  providing
management  consulting  advice to  certain  depository  institutions,  providing
securities   brokerage  services,   arranging   commercial  real  estate  equity

                                      -13-
<PAGE>

financing,  underwriting and dealing in government  obligations and money market
instruments,  providing  consumer financial  counseling,  operating a collection
agency,  owning and operating a savings  association,  operating a credit bureau
and conducting certain real estate investment activities and acting as insurance
agent for certain types of insurance.  Certain other activities,  including real
estate brokerage and syndication,  land development, and property management not
related to credit transactions, are not permissible.

       The Act and the  regulations  of the Board of  Governors  prohibit a bank
holding   company  and  its   subsidiaries   from  engaging  in  certain  tie-in
arrangements  in  connection  with any  extension  of  credit,  lease or sale of
property, or furnishing of services.

         The Act also imposes  certain  restrictions  upon dealing by affiliated
banks with the holding company and among  themselves  including  restrictions on
interbank   borrowing  and  upon  dealings  in  respect  to  the  securities  or
obligations of the holding company or other affiliates.

       The earnings of banks and consumer finance  companies,  and therefore the
earnings of the Company (and its subsidiaries),  are affected by the policies of
regulatory authorities,  including the Board of Governors of the Federal Reserve
System.  An important  function of the Federal  Reserve Board is to regulate the
national supply of bank credit in an effort to prevent recession and to restrain
inflation.  Among the  procedures  used to implement  these  objectives are open
market operations in U.S. Government securities, changes in the discount rate on
member bank borrowings,  and changes in reserve requirements against member bank
deposits. These procedures are used in varying combinations to influence overall
growth and distribution of bank loans,  investments and deposits,  and their use
also may affect  interest rates charged on loans or paid for deposits.  Monetary
policies  of the  Federal  Reserve  Board have had a  significant  effect on the
operating  results of commercial  banks in the past and are expected to continue
to do so in the future.  The effect,  if any, of such  policies  upon the future
business and earnings of the Company cannot accurately be predicted. The Company
makes no attempt to predict the effect on its  revenues  and earnings of changes
in general economic,  industrial, and international conditions or in legislation
and governmental regulations.

Business Risks

       Except for the  historical  information  contained  herein,  the  matters
discussed in this Form 10-K include certain  forward-looking  statements  within
the  meaning  of  Section  27A of the  Securities  Act  and  Section  21E of the
Securities  Exchange Act of 1934,  as amended (the  "Exchange  Act"),  which are
intended to be covered by the safe harbors  created  thereby.  Those  statements
include, but may not be limited to, all statements regarding the intent,  belief
and  expectations  of  the  Company  and  its  management,  such  as  statements
concerning the Company's future profitability.  Investors are cautioned that all
forward-looking  statements involve risks and uncertainties  including,  without
limitation, factors detailed from time to time in the Company's filings with the
Securities  and  Exchange  Commission.  Although the Company  believes  that the
assumptions  underlying  the  forward-looking  statements  contained  herein are
reasonable, any of the assumptions could be inaccurate.  Therefore, there can be
no  assurance  that  the   forward-looking   statements   contained  herein  are
reasonable, and any of the assumptions could be inaccurate. Therefore, there can
be no assurance that the  forward-looking  statements included in this Form 10-K
will  prove  to be  accurate,  and in  light  of the  significant  uncertainties
inherent in the  forward-looking  statements  included herein,  the inclusion of
such information  should not be regarded as a presentation by the Company or any
other person that the objectives and plans of the Company will be achieved.

       Growth  Strategy.  The  Company has  pursued  and  continues  to pursue a
strategy of growth.  The success of the  Company's  growth  strategy will depend
largely  upon its  ability to manage its credit risk and control its costs while
providing  competitive  products and services.  This growth strategy may present
special  risks,  such as the risk that the Company will not  efficiently  handle
growth  with its  present  operations,  the risk of  dilution  of book value and
earnings per share as a result of an acquisition, the risk that earnings will be
adversely  affected by the  start-up  costs  associated  with  establishing  new
products and services, the risk that the Company will not be able to attract and
retain qualified personnel needed for expanded operations, and the risk that its
internal monitoring and control systems may prove inadequate.

       Control by Management;  Anti-Takeover Provisions.  Evan E. Davis, John D.
Kidd and D.  Bruce  Knox (the  "Principal  Stockholders")  own in the  aggregate
approximately 33.5% of the outstanding shares of Common Stock of the Company. In
addition to Ohio and federal laws and regulations  governing  changes in control
of insured depository institutions,  the Company's Articles of Incorporation and
Code of  Regulations  contain  certain  provisions  that may  delay or make more
difficult an acquisition of control of the Company.  For example,  the Company's
Articles of  Incorporation  do not exempt the  Company  from the  provisions  of
Ohio's "control share acquisition" and "merger  moratorium"  statutes.  Assuming
that the  Principal  Stockholders  continue to retain at least a majority of the
outstanding  voting  shares of the Company,  such  ownership  position  could be
expected to deter any prospective  acquirer from seeking to acquire ownership or
control of the Company,  and the Principal  Stockholders would be able to defeat
any acquisition  proposal that requires approval of the Company's  stockholders,
if the  Principal  Stockholders  chose  to do so.  In  addition,  the  Principal

                                      -14-
<PAGE>


Stockholders  may make a private  sale of shares of common  stock of the Company
that they own,  including to a person seeking to acquire ownership or control of
the  Company.  The Company  has  3,000,000  shares of  authorized  but  unissued
preferred  stock,  par value $ .01 per share,  which may be issued in the future
with such rights,  privileges and  preferences as are determined by the Board of
Directors  of the  Company.  In December  1997,  the Board of  Directors  of the
Company  approved and adopted a stockholder  rights plan that  contemplates  the
issuance of rights to purchase  preferred  stock of the Company to the Company's
common  stockholders  of record as of  February  17,  1998,  as set forth in the
Rights  Agreement  entered  into  between  the  Company  and Fifth Third Bank on
January 23, 1998. On December 26, 2000, the Company amended the Rights Agreement
to appoint  Registrar and Transfer  Company as successor  Rights Agent under the
Rights Agreement due to the resignation of Fifth Third Bank as Rights Agent. The
Board of Directors  of the Company  approved the  appointment  of Registrar  and
Transfer Company pursuant to a resolution dated November 14, 2000.

     Limited  Trading  Market;   Shares  Eligible  for  Future  Sale;   Possible
Volatility  of Stock Price.  The Common  Stock is traded on the Nasdaq  National
Market under the symbol  "OAKF." During the 12 months ending March 13, 2001, the
average  weekly  trading  volume in the Common  Stock has been less than  20,200
shares per week.  There can be no  assurance  given as to the  liquidity  of the
market  for the Common  Stock or the price at which any sales may  occur,  which
price will depend upon, among other things,  the number of holders thereof,  the
interest of securities  dealers in  maintaining a market in the Common Stock and
other factors beyond the control of the Company.  The market price of the Common
Stock could be  adversely  affected by the sale of  additional  shares of Common
Stock owned by the Company's current  shareholders.  The Principal  Shareholders
are  permitted  to  sell  certain   limited  amounts  of  Common  Stock  without
registration,  pursuant to Rule 144 under the  Securities  Act. The market price
for the Common Stock could be subject to significant fluctuations in response to
variations  in quarterly and yearly  operating  results,  general  trends in the
banking industry and other factors. In addition, the stock market can experience
price and volume  fluctuations that may be unrelated or  disproportionate to the
operating  performance  of  affected  companies.  These broad  fluctuations  may
adversely affect the market price of the Common Stock.

     Dependence on Management.  The Company's  success depends to a great extent
on its senior management, including its Chairman, Evan E. Davis; President, John
D. Kidd;  Executive Vice President,  Richard P. LeGrand;  and Secretary,  H. Tim
Bichsel; Chief Information Officer, D. Bruce Knox; Chief Administrative Officer,
David G. Ratz; Treasurer and Chief Financial Officer, Ronald J. Copher; and Vice
President,  Ralph E. Coffman,  Jr. The loss of their  individual  services could
have a material  adverse  impact on the  Company's  financial  stability and its
operations. In addition, the Company's future performance depends on its ability
to attract and retain key personnel and skilled  employees,  particularly at the
senior  management level. The Company's  financial  stability and its operations
could be  adversely  affected  if,  for any  reason,  one or more key  executive
officers ceased to be active in the Company's  management.  The Company does not
own or currently plan to acquire "key man" life insurance on the lives of any of
its key employees.

     Competition.   Banking   institutions   operate  in  a  highly  competitive
environment.  The Company competes with other commercial  banks,  credit unions,
savings institutions,  finance companies,  mortgage companies, mutual funds, and
other financial institutions, many of which have substantially greater financial
resources  than the Company.  Certain of these  competitors  offer  products and
services  that are not offered by the Company  and certain  competitors  are not
subject to the same extensive laws and regulations as the Company. Additionally,
consolidation of the financial  services  industry in Ohio and in the Midwest in
recent  years  has  increased  the level of  competition.  Recent  and  proposed
regulatory  changes may further  intensify  competition in the Company's  market
area.

     Holding Company Structure; Government Regulations and Policies. The Company
is a  multi-bank  holding  company,  the  profitability  of  which  is  entirely
dependent  on the  profitability  of the  Banks  and  the  upstream  payment  of
dividends  from the Banks to the Company.  Under state and federal  banking law,
the  payment of  dividends  by the  Company and the Banks are subject to capital
adequacy  requirements.  The inability of the Banks to generate  profits and pay
such dividends to the Company, or regulator  restrictions on the payment of such
dividends  to the Company  even if earned,  would have an adverse  effect on the
financial  condition  and results of operations of the Company and the Company's
ability to pay dividends to the shareholders.










                                      -15-
<PAGE>
Item 2.  Properties.

         The  registrant  and its  subsidiaries  operate  from  23  full-service
banking  offices,  6  full-service   consumer-financing   offices,  and  3  loan
production  offices in Ohio.  In addition,  the Company  operates two  executive
offices in Jackson,  Ohio and executive offices and an operations center in Blue
Ash, Ohio. The offices are located in the following counties:

Jackson - Oak Hill,  Jackson,  Ironmakers, Jackson  Walmart, Wellston, executive
          offices of Oak Hill Banks and Oak Hill Financial, Inc., Action Finance
          Jackson, and Action Finance Wellston
Ross - Richmond Dale, Chillicothe, and Chillicothe K-Mart
Scioto -  Wheelersburg,  Portsmouth,  West  Portsmouth,  and  Action  Finance
          Portsmouth
Gallia - Gallipolis and Action Finance Gallipolis
Pickaway - Circleville and Action Finance Circleville
Warren - Franklin and Mason
Butler - Trenton and Middletown
Vinton - McArthur
Athens - Athens
Hamilton - Blue Ash, executive  offices and operations center of Towne Bank, and
           Cherry Grove
Fairfield - Lancaster loan production office
Franklin - Groveport loan production office
Adams - Action Finance West Union
Hocking - Logan loan production office
Clermont - Amelia

         The following table indicates which properties the Company leases,  the
term of the lease, and end of lease options.  All leases are comparable to other
leases in the respective market areas and do not contain provisions  detrimental
to the Company or its subsidiaries.
<TABLE>
<CAPTION>

                                              Beginning                     End of Lease Five Year Renewal Options
Branch                                   and Length of Term             One                    Two                 Three
------                                   ------------------             ---                    ---                 -----
<S>                                        <C>        <C>               <C>                    <C>                  <C>
Chillicothe                              11/1/98     5 years             X
Chillicothe K-Mart                       6/28/94     5 years                                    X
West Portsmouth                          2/18/97     8 years                                                         X
Jackson Walmart                          10/28/98   5 years                                     X
Oak Hill Banks
   Administrative Offices                10/1/98     5 years             X
Action Finance Jackson                   1/14/98     5 years                                    X
Action Finance Wellston                  1/3/98       5 years                                   X
Action Finance West Union                10/1/99     5 years             X
Action Finance Portsmouth                11/1/99     5 years             X
Action Finance Circleville               11/1/00     5 years             X
Action Finance Gallipolis                2/1/01       3 years            One - three year renewal option
Groveport loan production                6/1/99       1 month            Renewable on a monthly basis
Lancaster loan production                12/1/99     3 years             Renegotiable at the end of the lease
Logan loan production                    12/1/99     1 year              Two - one year renewal options
Middletown                               8/19/99     7 years             Two - three year renewal options
Towne Bank operations                    5/1/99       1 year             One - one year renewal option

</TABLE>

Item 3.  Legal Proceedings.

         Except  for  routine  litigation   incident  to  their  business,   the
registrant and its  subsidiaries  are not a party to any material  pending legal
proceedings and none of their property is the subject of any such proceedings.

Item 4.  Submission of Matters to a Vote of Security Holders.

         No matters were submitted to the shareholders during the fourth quarter
of 2000.

                                      -16-
<PAGE>
                                     PART II

Item 5.  Market  for the  Registrant's  Common  Equity and  Related  Shareholder
         Matters.

SHAREHOLDER INFORMATION

         The common stock of the Company is traded on the Nasdaq National Market
System under the symbol "OAKF."

         The high and low sales prices for the Company  common stock during each
quarter of 1999 and 2000 are as follows:

Quarter
Ended                      High             Low

3/31/99                    $19.75         $16.75
6/30/99                     19.25          16.88
9/30/99                     18.75          16.50
12/31/99                    17.63          14.63
3/31/00                     15.44          12.75
6/30/00                     16.38          12.25
9/30/00                     16.50          13.56
12/31/00                    15.94          13.88


         At March 13, 2001, the Company had approximately  2,400 stockholders of
record and 5,097,631 shares of common stock outstanding.

         Dividends.  The  ability  of the  Company  to  pay  cash  dividends  to
stockholders is limited by its ability to receive dividends from its subsidiary.
The State of Ohio places certain limitations on the payment of dividends by Ohio
state-chartered banks.

         The Company  declared  the  following  dividends  per share in 1999 and
2000:

Quarter                    Dividend
Ended                      Declared

3/31/99                     $0.08
6/30/99                      0.08
9/30/99                      0.08
12/31/99                     0.10
3/31/00                      0.10
6/30/00                      0.10
9/30/00                      0.10
12/31/00                     0.11

         Future cash and stock  dividends will be subject to  determination  and
declaration by the Board of Directors of the Company, taking into consideration,
among  other  factors,   the  Company's   financial  condition  and  results  of
operations,  investment  opportunities,  capital  requirements,  and  regulatory
limitations.

         Stock Transfer Agent. Inquiries regarding stock transfer, registration,
lost certificates,  or changes in name and address should be directed in writing
to the Company's stock transfer agent:

The Registrar and Transfer Company
10 Commerce Drive
Cranford, NJ 07016-3572
(800) 456-0596

     Annual Meeting of  Shareholders.  The Annual Meeting of Shareholders of Oak
Hill  Financial,  Inc.  will be held on April 25, 2001, at 1:00 p.m. at the Ohio
State University  Extension South District Office,  17 Standpipe Road,  Jackson,
Ohio (the  Extension  Office is located just off State Route 93, 1.7 miles south
of Jackson).

                                      -17-
<PAGE>
Item 6.  Selected Financial Data
<TABLE>
<CAPTION>

                                                                    At or For the Year Ended December 31,
                                                   2000             1999            1998             1997             1996
                                                                      (In thousands, except share data)
<S>                                               <C>              <C>              <C>            <C>               <C>
SUMMARY OF FINANCIAL CONDITION (1) (2)

Total assets                                   $694,637         $600,100        $552,649         $473,341         $407,461
Interest-bearing deposits
   and federal funds sold                           442            4,516          12,197            4,031            5,415
Investment securities                            61,270           53,338         100,027           81,396           79,748
Loans receivable-- net (3)                      599,086          507,969         411,246          360,797          297,886
Deposits                                        562,617          488,880         465,674          391,265          334,138
Federal Home Loan Bank (FHLB)
   advances and other borrowings                 77,595           60,852          37,413           37,708           33,086
Stockholders' equity                             49,896           47,724          46,574           41,349           37,620


SUMMARY OF OPERATIONS (1) (2)

Interest income                                $ 54,578         $ 45,250        $ 41,599         $ 36,089         $ 30,954
Interest expense                                 29,510           22,419          21,339           18,626           15,891
                                                -------          -------         -------          -------          -------

   Net interest income                           25,068           22,831          20,260           17,463           15,063
Provision for loan losses                         2,263            2,432           1,266            1,171              879
                                                -------          -------         -------          -------          -------

   Net interest income after
      provision for loan losses                  22,805           20,399          18,994           16,292           14,184

Gain on sale of loans                               174              477           1,418              250              229
Gain (loss) on sale of assets                      (390)          (2,141)            281              (33)              99
Other non-interest income                         2,521            2,072           1,550            1,427            1,442
General, administrative and other
  expense (4) (5)                                15,620           14,642          11,788           11,058           10,012
                                                -------          -------         -------          -------          -------

   Earnings before federal income
      taxes                                       9,490            6,165          10,455            6,878            5,942
Federal income taxes                              3,172            2,083           3,415            2,441            1,938
                                                -------          -------         -------          -------          -------

Net earnings                                   $  6,318         $  4,082        $  7,040         $  4,437         $  4,004
                                                =======          =======         =======          =======          =======


PER SHARE INFORMATION (6)

Basic earnings per share                      $    1.21       $      .77       $    1.34       $      .84       $      .76
Book value                                         9.76             8.97            8.90             7.86             7.16

</TABLE>










                                      -18-

<PAGE>

<TABLE>
<CAPTION>
                                                       At or For the Year Ended December 31,
                                                   2000             1999            1998             1997             1996

OTHER STATISTICAL AND
OPERATING DATA
<S>                                                 <C>             <C>              <C>              <C>              <C>
Return on average assets                           0.98%            0.71%           1.37%            1.00%            1.05%
Return on average equity                          12.94             8.48           15.86            11.28            11.10
Net interest margin                                4.04             4.16            4.10             4.17             4.15
Interest rate spread during period                 3.39             3.60            3.47             3.68             3.59
Non-interest expense to average assets             2.43             2.56            2.30             2.50             2.63
Total allowance for loan losses
   to nonperforming loans                         250.9            192.4           191.9            232.4            253.5
Total allowance for loan losses
   to total loans                                  1.19             1.19            1.10             1.10             1.05
Nonperforming loans to total loans                 0.47             0.62            0.58             0.47             0.42
Nonperforming assets to total assets               0.45             0.56            0.44             0.36             0.31
Net charge-offs to average loans                   0.22             0.20            0.18             0.11             0.11
Equity to assets at period end                     7.18             7.95            8.43             8.74             9.23
Dividend payout ratio                             33.64            44.03           19.63            22.26            23.68

---------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)  The Company merged  Unity  Savings  Bank  with and into its Oak Hill  Banks
     subsidiary  on  October  2,  1997.  The  merger  was  accounted  for  as  a
     pooling-of-interests. Accordingly, the consolidated financial statements as
     of and for the year ended December 31, 1996,  have previously been restated
     as if the merger had occurred January 1, 1996.

(2)  The Company completed  a merger with Towne  Financial  Corporation  and its
     subsidiary  The Blue Ash Building and Loan Company on October 1, 1999.  The
     merger  was  accounted  for  as a  pooling-of-interests.  Accordingly,  the
     consolidated  financial  statements as of and for the years ended  December
     31, 1996 through 1998,  inclusive,  have previously been restated as if the
     merger had occurred on January 1, 1996.

(3)  Includes loans held for sale.

(4)  Non-interest  expense  for  1997  includes  $920,000  in  pre-tax  expenses
     incurred pursuant to the merger with Unity Savings Bank.

(5)  Non-interest expense for 1999 includes $1.4 million in pre-tax expenses, of
     which $250,000 is included in "other operating expenses", incurred pursuant
     to the merger with Towne Financial Corporation.

(6)  Per share information  ives  retroactive  effect to the issuance of 643,690
     shares in the Unity  transaction,  the 5-for-4 stock split effected June 1,
     1998, and the issuance of 917,361 shares in the Towne transaction.














                                      -19-

<PAGE>
Item 7.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations.

OVERVIEW

         The principal  asset of Oak Hill  Financial,  Inc.  ("Company")  is its
ownership of Oak Hill Banks ("Oak Hill") and Towne Bank ("Towne"), (collectively
hereinafter  "Banks").  Accordingly,  the Company's  results of  operations  are
primarily  dependent  upon the  results of  operations  of the Banks.  The Banks
conduct  general  commercial  banking  businesses  that  consist  of  attracting
deposits  from the general  public and using those funds to originate  loans for
commercial, consumer, and residential purposes.

         The  Banks'  profitability  depends  primarily  on their  net  interest
income,   which  is  the  difference  between  interest  income  generated  from
interest-earning  assets (i.e., loans and investments) less the interest expense
incurred on  interest-bearing  liabilities (i.e.,  deposits and borrowed funds).
Net  interest  income is affected by the  relative  amounts of  interest-earning
assets and  interest-bearing  liabilities,  and the interest rates paid on these
balances.  Additionally,  and to a lesser extent,  profitability  is affected by
such factors as the level of non-interest income and expenses, the provision for
losses on  loans,  and the  effective  tax rate.  Non-interest  income  consists
primarily  of service  charges and other fees and income from the sale of loans.
Non-interest  expenses consist of compensation  and benefits,  occupancy-related
expenses, FDIC deposit insurance premiums, and other operating expenses.

         Management's  discussion and analysis of earnings and related financial
data are presented herein to assist investors in understanding  the consolidated
financial  condition  and results of operations of the Company as of and for the
years  ended  December  31,  2000 and 1999.  This  discussion  should be read in
conjunction with the  consolidated  financial  statements and related  footnotes
presented elsewhere in this report.

FORWARD LOOKING STATEMENTS

         In  the  following  pages,  management  presents  an  analysis  of  the
Company's  financial  condition  as of  December  31,  2000,  and the results of
operations  for the year ended  December 31, 2000, as compared to prior periods.
In addition to this historical  information,  the following discussion and other
sections of this Annual Report contain  forward-looking  statements that involve
risks and uncertainties.  Economic  circumstances,  the Company's operations and
the Company's actual results could differ  significantly from those discussed in
the  forward-looking  statements.  Some  of the  factors  that  could  cause  or
contribute to such  differences are discussed herein but also include changes in
the economy and interest  rates in the nation and the Company's  general  market
area.  Without limiting the foregoing,  some of the  forward-looking  statements
include  management's  establishment  of an allowance  for loan losses,  and its
statements  regarding  the  adequacy  of such  allowance  for loan  losses;  and
management's belief that the allowance for loan losses is adequate.

FINANCIAL CONDITION

         The Company's  total assets  amounted to $694.6  million as of December
31, 2000, an increase of $94.5 million,  or 15.8%, over the $600.1 million total
at December  31,  1999.  The increase  was funded  primarily  through  growth in
deposits of $73.7  million,  or 15.1%,  an  increase  in FHLB  advances of $10.5
million,  respective increases of $2.3 million and $5.0 million in notes payable
and guaranteed preferred beneficial interests in junior subordinated  debentures
(hereinafter "subordinated debentures"), and an increase in stockholders' equity
of $2.2 million.

         Cash and due from banks, federal funds sold, and investment securities,
including mortgage-backed  securities,  increased by $2.7 million, or 3.8%, to a
total of $74.6  million at  December  31,  2000,  compared  to $71.9  million at
December 31, 1999. Investment securities increased by $7.9 million, as purchases
of $30.4 million exceeded maturities and repayments of $2.7 million and sales of
$21.7 million. Federal funds sold decreased by $3.8 million during 2000.

         Loans  receivable  totaled  $599.1  million at December  31,  2000,  an
increase of $91.1 million, or 17.9%, over total loans at December 31, 1999. Loan
disbursements totaled $303.7 million during 2000, which were partially offset by
loan sales of $10.6 million and principal  repayments  of $198.8  million.  Loan
origination  and sales  volume  decreased  by $21.1  million and $20.0  million,
respectively,  as compared to the same period in 1999.  The Company's  allowance
for loan losses  amounted to $7.2 million at December  31, 2000,  an increase of
$1.1 million,  or 17.4%,  over the total at December 31, 1999. The allowance for
loan losses  represented  1.19% of the total loan portfolio at both December 31,
2000 and 1999. Net charge-offs  totaled  approximately $1.2 million and $883,000
for the years ended  December  31, 2000 and 1999,  respectively.  The  Company's
allowance  represented  250.9% and 192.4% of nonperforming  loans, which totaled
$2.9  million  and $3.2  million at December  31,  2000 and 1999,  respectively.
Nonperforming  loans were  comprised of $549,000 in  installment  loans and $2.3
million of loans  secured  primarily by commercial  real estate and  one-to-four
family residential real estate. In management's opinion, all nonperforming loans
were adequately collateralized at December 31, 2000.

                                      -20-
<PAGE>
         Deposits  totaled  $562.6  million at December 31, 2000, an increase of
$73.7 million, or 15.1%, over the $488.9 million total at December 31, 1999. The
increase resulted primarily from management's  continuing  marketing efforts and
competitive  pricing with respect to mid-term  certificate  of deposit  products
throughout  the Banks' branch  network.  Proceeds from deposit  growth were used
primarily to fund loan originations.

         Advances  from the  Federal  Home Loan Bank  totaled  $70.2  million at
December 31, 2000, an increase of $10.5 million, or 17.5%, over the December 31,
1999 total. Notes payable increased by $2.3 million.  Proceeds from advances and
notes payable were primarily used to fund loan originations during the period.

         In March 2000, a Delaware statutory business trust owned by the Company
(the "Trust"),  issued $5.0 million of mandatorily  redeemable debt  securities.
The debt securities issued by the trust are included in the Company's regulatory
capital,  specifically  as a component of Tier I capital.  The proceeds from the
issuance of the subordinated  debentures and common  securities were used by the
Trust to  purchase  from the Company  $5.0  million of  subordinated  debentures
maturing on March 8, 2030. The subordinated debentures are the sole asset of the
Trust, and the Company owns all of the common securities of the Trust.  Interest
payments on the debt securities are to be made  semi-annually at an annual fixed
rate of interest of 10.875% and are reported as a component of interest  expense
on  borrowings.  The net proceeds  received by the Company were used for general
corporate  purposes,  including  repurchasing  the Company's stock and providing
general working capital.

         The  Company's  stockholders'  equity  amounted  to  $49.9  million  at
December 31, 2000,  an increase of $2.2  million,  or 4.6%,  over the balance at
December 31, 1999.  The increase  resulted  primarily  from net earnings of $6.3
million and a $1.5  million  decrease  in the  unrealized  losses on  securities
designated as available for sale, which were partially offset by $2.1 million in
dividends  declared on common stock and  purchases of treasury  shares  totaling
$3.9 million.

SUMMARY OF EARNINGS

         The table on page 25 shows for each category of interest-earning assets
and interest-bearing  liabilities,  the average amount outstanding, the interest
earned or paid on such amount, and the average rate earned or paid for the years
ended  December 31, 2000,  1999, and 1998. The table also shows the average rate
earned  on  all   interest-earning   assets,   the  average  rate  paid  on  all
interest-bearing  liabilities,  the interest  rate spread,  and the net interest
margin for the same periods.  Changes in net interest income are attributable to
either changes in average  balances  (volume change) or changes in average rates
(rate  change) for  interest-earning  assets and  interest-bearing  liabilities.
Volume change is  calculated as change in volume times the old rate,  while rate
change is calculated as change in rate times the old volume. The table on page 8
indicates  the dollar  amount of the change  attributable  to each  factor.  The
rate/volume  change, the change in rate times the change in volume, is allocated
between the volume change and the rate change at the ratio each component  bears
to the absolute value of their total.

COMPARISON  OF RESULTS OF OPERATIONS  FOR THE YEARS ENDED  DECEMBER 31, 2000 AND
1999

         GENERAL. Net earnings for the year ended December 31, 2000 totaled $6.3
million,  a $2.2 million,  or 54.8%,  increase over the amount reported in 1999.
The increase in earnings resulted  primarily from a $2.2 million increase in net
interest  income,  a $1.9  million  increase  in other  income,  and a  $169,000
decrease in the provision for losses on loans,  which were partially offset by a
$978,000  increase  in  general,  administrative  and other  expense  and a $1.1
million increase in the provision for federal income taxes.

         NET INTEREST INCOME.  Total interest income for the year ended December
31, 2000, amounted to $54.6 million, an increase of $9.3 million, or 20.6%, over
the $45.3  million  recorded for 1999.  Interest  income on loans  totaled $50.4
million,  an increase of $10.9  million,  or 27.7%,  over the 1999 period.  This
increase  resulted  primarily from a $107.2 million,  or 23.8%,  increase in the
weighted-average  ("average")  portfolio  balance from $449.9 million in 1999 to
$557.0  million in 2000,  coupled with a 28 basis point  increase in the average
yield  from  8.76%  in 1999 to  9.04% in 2000.  Interest  income  on  investment
securities  and other  interest-earning  assets  decreased by $1.6  million,  or
27.5%. The decrease resulted primarily from a $36.1 million, or 36.2%,  decrease
in the average  portfolio balance to $63.5 million in 2000 from $99.6 million in
1999,  which was partially  offset by an 80 basis point  increase in the average
yield, from 5.84% in 1999 to 6.64% in 2000.

         Total  interest  expense  amounted to $29.5  million for the year ended
December 31, 2000, an increase of $7.1 million, or 31.6%, over the $22.4 million
recorded in 1999.  Interest  expense on deposits  increased by $5.3 million,  or
27.5%, to a total of $24.8 million in 2000. The increase resulted primarily from
a $44.2 million, or 10.3%, increase in the average portfolio balance from $428.9
million  in 1999 to  $473.1  million  in 2000,  coupled  with a 70  basis  point
increase  in the average  cost of deposits  from 4.53% in 1999 to 5.23% in 2000.
Interest expense on borrowings increased by $1.8 million, or 58.6%, during 2000.
This  increase  was  due to a  $17.8  million  increase  in  average  borrowings
outstanding  coupled  with a 107 basis point  increase  in the  average  cost of
borrowings from 5.52% in 1999 to 6.59% in 2000.

                                      -21-
<PAGE>

         As a result of the  foregoing  changes in interest  income and interest
expense,  net interest income  increased by $2.2 million,  or 9.8%, for the year
ended December 31, 2000, as compared to 1999. The interest rate spread decreased
by 21 basis points to 3.39% in 2000 compared to 3.60% in 1999.  The net interest
margin decreased by 12 basis points to 4.04% in 2000 from 4.16% in 1999.

         PROVISION  FOR  LOSSES  ON LOANS.  The  provision  for  losses on loans
represents a charge to earnings to maintain the allowance at a level  management
believes is  adequate  to absorb  losses in the loan  portfolio.  The  Company's
provision  for  losses on loans  amounted  to $2.3  million  for the year  ended
December 31, 2000, a decrease of $169,000,  or 6.9%, compared to the same period
in 1999. The provision for losses on loans in 2000 generally  reflects the $91.2
million of growth in the loan  portfolio  during the year.  The  Company's  loan
growth in 2000 was comprised primarily of a $61.4 million, or 19.2%, increase in
loans secured by residential real estate and a $26.2 million, or 20.8%, increase
in commercial and other loans. Net loan charge-offs  amounted to $1.2 million in
2000, as compared to $883,000 in 1999.

         Although   management  believes  that  it  uses  the  best  information
available in providing  for possible loan losses and believes that the allowance
is adequate at December 31, 2000,  future  adjustments to the allowance could be
necessary and net earnings could be affected if  circumstances  and/or  economic
conditions differ  substantially from the assumptions used in making the initial
determinations.

         OTHER  INCOME.  Other  income  totaled  $2.3 million for the year ended
December  31, 2000,  an increase of $1.9  million,  over the amount  recorded in
1999. This increase  resulted  primarily from a $1.8 million decline in the loss
on sale of securities year-to-year and a $449,000, or 21.7%, increase in service
fees,  charges,  and other operating  income,  which were partially  offset by a
$303,000 decrease in gain on sale of loans. During the third and fourth quarters
of  2000,  the  Company  restructured  the  Banks'  investment  securities  into
higher-yield obligations of state and political subdivisions and U.S. Government
and agency securities at a loss of $381,000.

         GENERAL,  ADMINISTRATIVE AND OTHER EXPENSE. General, administrative and
other expense  totaled  $15.6  million for the year ended  December 31, 2000, an
increase of  $978,000,  or 6.7%,  over the 1999  total.  The  increase  resulted
primarily from a $1.2 million, or 16.3%,  increase in employee  compensation and
benefits,  a $665,000,  or 18.8%,  increase in other operating expenses,  and an
increase of $244,000, or 14.7%, in occupancy and equipment, which were offset by
the absence of $1.1 million in  merger-related  expenses  incurred in connection
with the October 1, 1999 merger of Towne Financial Corporation with and into the
Company  and  decreases  of $26,000  and  $13,000 in federal  deposit  insurance
premiums and franchise taxes, respectively.

         The increase in employee  compensation and benefits resulted  primarily
from increased  staffing levels required in connection with the establishment of
new branch locations, additional management staffing and normal merit increases.
The increase in other operating  expense resulted  primarily from an increase in
professional fees associated with the co-sourcing of the internal audit function
totaling $99,000,  an increase in costs associated with ATM transaction  charges
and data processing  totaling $165,000,  and a recognition of an impairment loss
totaling $185,000 relating to a former branch location.  The remaining  increase
of $235,000,  or 6.6%, was due to pro-rata increases in other operating expenses
attendant  to  the  Company's  overall  growth  year-to-year.  The  increase  in
occupancy  and  equipment  expense was due  primarily  to a $145,000,  or 67.5%,
increase in rent  expense,  coupled with  increases  in other  occupancy-related
costs, in connection with new branch locations opened in 2000.

         FEDERAL  INCOME TAXES.  The provision for federal income taxes amounted
to $3.2  million  for the year ended  December  31,  2000,  an  increase of $1.1
million, or 52.3%, over the $2.1 million recorded in 1999. The increase resulted
primarily from a $3.3 million, or 53.9%,  increase in earnings before taxes. The
effective  tax rates were 33.4% and 33.8% for the year ended  December  31, 2000
and 1999, respectively.

COMPARISON  OF RESULTS OF OPERATIONS  FOR THE YEARS ENDED  DECEMBER 31, 1999 AND
1998

         GENERAL. Net earnings for the year ended December 31, 1999 totaled $4.1
million,  a $3.0 million,  or 42.0%,  decrease from the amount reported in 1998.
The decrease in earnings  resulted  primarily  from a $2.9  million  increase in
general,  administrative  and other  expense,  a $1.2  million  increase  in the
provision  for losses on loans,  and a $2.8  million  decrease in other  income,
which were partially  offset by a $2.6 million  increase in net interest  income
and a $1.3 million decrease in the provision for federal income taxes.

                                      -22-
<PAGE>

         NET INTEREST INCOME.  Total interest income for the year ended December
31, 1999,  amounted to $45.3 million, an increase of $3.7 million, or 8.8%, over
the $41.6  million  recorded for 1998.  Interest  income on loans  totaled $39.4
million,  an increase  of $2.4  million,  or 6.4%,  over the 1998  period.  This
increase  resulted  primarily  from a $62.8 million,  or 16.2%,  increase in the
average portfolio balance outstanding  year-to-year,  which was partially offset
by an 81 basis point decrease in the average yield,  to 8.76% in 1999 from 9.57%
in 1998.  Interest  income on investment  securities and other  interest-earning
assets increased by $1.3 million, or 27.9%. The increase resulted primarily from
a 159 basis point increase in the average yield,  from 4.25% in 1998 to 5.84% in
1999,  which was partially  offset by a $7.4 million,  or 6.9%,  decrease in the
average portfolio balance outstanding year-to-year.

         Total  interest  expense  amounted to $22.4  million for the year ended
December 31, 1999, an increase of $1.1 million,  or 5.1%, over the $21.3 million
recorded in 1998. Interest expense on deposits increased by $31,000, or 0.2%, to
a total of $19.4 million in 1999. The increase  resulted  primarily from a $20.9
million,  or  7.4%,  increase  in  the  average  portfolio  balance  outstanding
year-to-year,  which was  partially  offset by a 33 basis point  decrease in the
average cost of deposits,  to 4.53% in 1999 from 4.86% in 1998. Interest expense
on borrowings  increased by $1.0 million,  or 54.0%,  during 1999. This increase
was due to a $22.5 million increase in average borrowings outstanding, which was
partially offset by a 62 basis point decrease in the average cost of borrowings,
to 5.52% in 1999 compared to 6.14% in 1998.

         As a result of the  foregoing  changes in interest  income and interest
expense,  net interest income increased by $2.6 million,  or 12.7%, for the year
ended December 31, 1999, as compared to 1998. The interest rate spread increased
by 13 basis  points from 3.47% in 1998 to 3.60% in 1999,  while the net interest
margin increased by 6 basis points from 4.10% in 1998 to 4.16% in 1999.

         PROVISION  FOR  LOSSES  ON LOANS.  The  provision  for  losses on loans
represents a charge to earnings to maintain the allowance at a level  management
believes is  adequate  to absorb  losses in the loan  portfolio.  The  Company's
provision  for  losses on loans  amounted  to $2.4  million  for the year  ended
December 31, 1999, an increase of $1.2 million,  or 92.1%,  compared to the same
period in 1998. The provision for losses on loans in 1999 generally reflects the
$96.7 million of growth in the loan  portfolio over the year. The Company's loan
growth in 1999 was comprised primarily of a $56.5 million, or 21.5%, increase in
loans secured by residential real estate and a $34.7 million, or 37.9%, increase
in  commercial  and other loans.  Net loan  charge-offs  amounted to $883,000 in
1999, as compared to $683,000 in 1998.

         OTHER INCOME. Other income totaled $408,000 for the year ended December
31, 1999, a decrease of $2.8  million,  from the amount  recorded in 1998.  This
decrease  resulted  primarily  from a $2.1 million loss on sale of securities as
compared  to a  $281,000  gain on sale of  securities  in the 1998  period and a
$941,000  decrease in gain on sale of loans,  which were  partially  offset by a
$522,000,  or 33.7%,  increase in service  fees,  charges,  and other  operating
income.  The $2.1  million  loss on sale of  securities  was  incurred  by Towne
Financial  Corporation prior to its merger with and into the Company in order to
bring  Towne   Financial's   portfolio  into   conformance  with  the  Company's
asset/liability management and credit policies.

         GENERAL,  ADMINISTRATIVE AND OTHER EXPENSE. General, administrative and
other expense  totaled  $14.6  million for the year ended  December 31, 1999, an
increase of $2.9 million,  or 24.2%,  over the 1998 total. The increase resulted
primarily  from  expenses  of $1.1  million  incurred  in  connection  with  the
previously  mentioned Towne merger,  including $623,000 for the cost of employee
severance pay related thereto.  In addition there was a $1.2 million,  or 18.4%,
increase in employee  compensation and benefits, a $557,000,  or 18.7%, increase
in other  operating  expenses,  and an  increase  of $9,000 in  federal  deposit
insurance  premiums,  which were  partially  offset by  decreases  of $8,000 and
$28,000 in occupancy and equipment and franchise taxes, respectively.

         The increase in employee  compensation and benefits resulted  primarily
from increased  staffing levels required in connection with the establishment of
new branch locations and additional  management  staffing,  combined with normal
merit increases. The increase in other operating expense resulted primarily from
increases in professional  fees and costs  attendant to the continued  reporting
requirements of a public company,  as well as,  increases in expenses related to
the Company's overall growth and continuing marketing efforts year-to-year.

         FEDERAL  INCOME TAXES.  The provision for federal income taxes amounted
to $2.1  million  for the year ended  December  31,  1999,  a  decrease  of $1.3
million, or 39.0%, from the $3.4 million recorded in 1998. The decrease resulted
primarily from a $4.3 million, or 41.0%,  decrease in earnings before taxes. The
effective  tax rates were 33.8% and 32.7% for the year ended  December  31, 1999
and 1998, respectively.

LIQUIDITY AND CAPITAL RESOURCES

         Like  other  financial  institutions,  the  Company  must  ensure  that
sufficient funds are available to meet deposit  withdrawals,  loan  commitments,
and expenses.  Control of the Company's cash flow requires the  anticipation  of
deposit  flows and loan  payments.  The Company's  primary  sources of funds are
deposits,  borrowings and principal and interest  payments on loans. The Company
uses funds from deposit  inflows,  proceeds  from  borrowings  and principal and
interest  payments  on loans  primarily  to  originate  loans,  and to  purchase
short-term investment securities and interest-bearing deposits.

         At December 31, 2000, the Company had $321.4 million of certificates of
deposit maturing within one year. It has been the Company's historic  experience

                                      -23-
<PAGE>

that such  certificates  of deposit will be renewed at market rates of interest.
It is  management's  belief that maturing  certificates of deposit over the next
year will  similarly be renewed at market  rates of interest  without a material
adverse effect on the results of operations.

         In the  event  that  certificates  of  deposit  cannot  be  renewed  at
prevalent  market rates, the Company can obtain up to $161.4 million in advances
from the Federal Home Loan Bank of Cincinnati  (FHLB).  Also, as an  operational
philosophy,  the Company seeks to obtain  advances to help with  asset/liability
management and liquidity. At December 31, 2000, the Company had $70.2 million of
outstanding FHLB advances.

         At December 31, 2000,  loan  commitments,  or loans  committed  but not
closed,  totaled $14.5  million.  Additionally,  the Company had unused lines of
credit  and  letters  of  credit   totaling  $64.6  million  and  $1.6  million,
respectively.  Funding  for these  amounts is  expected  to be  provided  by the
sources described above.  Management believes the Company has adequate resources
to meet its normal funding requirements.

EFFECT OF RECENT ACCOUNTING PRONOUNCEMENTS

         In June 1998, the Financial  Accounting Standards Board ("FASB") issued
Statement of Financial  Accounting  Standards ("SFAS") No. 133,  "Accounting for
Derivative  Instruments  and Hedging  Activities,"  which  requires  entities to
recognize  all  derivatives  in their  financial  statements as either assets or
liabilities measured at fair value.

         SFAS  No.  133  specifies   new  methods  of  accounting   for  hedging
activities,  prescribes  the  items and  transactions  that may be  hedged,  and
specifies detailed criteria to be met to qualify for hedging accounting.

         The definition of a derivative  financial instrument is complex, but in
general,  it is an instrument with one or more underlyings,  such as an interest
rate or foreign exchange rate, that is applied to a notional amount,  such as an
amount of currency, to determine the settlement amount(s). It generally requires
no  significant  initial  investment and can be settled net or by delivery of an
asset that is readily  convertible to cash.  SFAS No. 133 applies to derivatives
embedded in other contracts, unless the underlying of the embedded derivative is
clearly and closely  related to the host  contract.  SFAS No. 133, as amended by
SFAS No. 137, is effective  for fiscal years  beginning  after June 15, 2000. On
adoption, entities are permitted to transfer held-to-maturity debt securities to
an  available-for-sale  or trading  category without calling into question their
intent to hold other debt  securities  to  maturity  in the  future.  Management
adopted SFAS No. 133 effective  January 1, 2001, as required,  without  material
effect  on  the  Company's   consolidated   financial  position  or  results  of
operations.

         In  September  2000,  the FASB  issued SFAS No.  140,  "Accounting  for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities",
which  revises  the  standards  for  accounting  for  securitizations  and other
transfers of financial assets and collateral and requires  certain  disclosures,
but carries over most of the provisions of SFAS No. 125 without reconsideration.
SFAS No. 140 is effective for  transfers  and servicing of financial  assets and
extinguishments of liabilities  occurring after March 31, 2001. The Statement is
effective for recognition and reclassification of collateral and for disclosures
relating to  securitization  transactions and collateral for fiscal years ending
after December 15, 2000.  SFAS No. 140 is not expected to have a material effect
on the Company's financial position or results of operations.















                                      -24-
<PAGE>

<TABLE>
<CAPTION>
                                                                         AVERAGE BALANCES AND INTEREST RATES
                                                                               Year Ended December 31,
                                                       2000                             1999                             1998
                                                       ----                             ----                             ----
                                                    Interest                      Interest                       Interest
                                           Average   Income/  Average    Average   Income/   Average    Average  Income/   Average
                                           Balance   Expense   Rate      Balance   Expense    Rate      Balance  Expense    Rate
                                           -------   -------   ----      -------   -------    ----      -------  -------    ----
                                                                              (Dollars in thousands)
<S>                                          <C>       <C>     <C>         <C>       <C>       <C>       <C>       <C>       <C>
Interest-earning assets:
  Loans receivable                        $557,038   $50,362   9.04%     $449,873  $39,431    8.76%   $387,057  $37,049     9.57%
  Investment securities                     62,049     4,120   6.64        86,329    5,208    6.03      93,476    3,829     4.10
  Federal funds sold                           803        62   7.72        12,567      587    4.67      11,794      661     5.60
  Interest-earning deposits                    647        34   5.26           685       24    3.50       1,707       60     3.51
                                           -------    ------   ----       -------   ------    ----     -------   ------     ----
      Total interest-earning assets        620,537    54,578   8.80       549,454   45,250    8.24     494,034   41,599     8.42

Non-interest-earning assets                 20,991                        22,856                         18,383
                                           -------                       -------                        -------

      Total assets                        $641,528                      $572,310                       $512,417
                                           =======                       =======                        =======

Interest-bearing liabilities:
  Deposits                                $473,149    24,764   5.23     $428,915   19,426     4.53     $399,249   19,395     4.86
  Borrowings                                72,029     4,746   6.59       54,192    2,993     5.52       31,661    1,944     6.14
                                           -------    ------   ----      -------   ------     ----     -------    ------     ----
      Total interest-bearing liabilities   545,178    29,510   5.41      483,107   22,419     4.64      430,910   21,339     4.95
                                                      ------   ----                ------     ----                ------     ----
Non-interest-bearing liabilities            47,516                        41,076                         37,125

Stockholders' equity                        48,834                        48,127                         44,382
                                           -------                       -------                        -------

      Total liabilities and               $641,528                      $572,310                       $512,417
        stockholders' equity               =======                       =======                        =======


Net interest income and interest rate                $25,068   3.39%              $22,831     3.60%              $20,260     3.47%
 spread                                               ======   ====                ======     ====                ======     ====

Net interest margin (1)                                        4.04%                          4.16%                          4.10%
                                                               ====                           ====                           ====

Average interest-earning assets to
  average interest-bearing liabilities                       113.82%                        113.73%                        114.65%
                                                             ======                         ======                         ======
</TABLE>

(1)  The net interest  margin is the net interest  income divided by the average
     interest-earning assets.



<TABLE>
<CAPTION>
                                                                                 RATE/VOLUME TABLE

                                                                               Year Ended December 31,
                                                                               -----------------------
                                                                2000 vs. 1999                            1999 vs. 1998
                                                                -------------                            -------------
                                                         Increase (decrease) due to               Increase (decrease) due to
                                                     Volume         Rate         Total         Volume        Rate         Total
                                                     ------         ----         -----         ------        ----         -----
<S>                                                  <C>           <C>            <C>            <C>         <C>            <C>
                                                                               (Dollars in thousands)
Changes in interest income attributable to:
     Loan receivable                                $ 9,632       $1,299       $10,931         $5,761      $(3,379)      $2,382
     Investment securities                           (1,667)         579        (1,088)          (301)       1,680        1,379
     Federal funds sold                                (926)         401          (525)            40         (114)         (74)
     Interest-earning deposits with banks                (2)          12            10            (35)          (1)         (36)
                                                     ------        -----        ------          -----       ------        -----
          Total interest income                     $ 7,037       $2,291       $ 9,328         $5,465      $(1,814)      $3,651
                                                     ======        =====        ======          =====        ======       =====

Changes in interest expense attributable to:
     Deposits                                       $ 2,137       $3,201       $ 5,338         $1,396      $(1,365)      $   31
     Borrowings                                       1,091          662         1,753          2,833       (1,784)       1,049
                                                     ------        -----        ------          -----       ------        -----
          Total interest expense                    $ 3,228       $3,863       $ 7,091         $4,229       $(3,149)     $1,080
                                                     ======        =====        ======          =====        ======       =====

Increase in net interest income                                                $ 2,237                                   $2,571
                                                                                ======                                    =====
</TABLE>







Item 7A.   Quantitative and Qualitative Disclosure About Market Risk

         None.

Item 8.   Financial Statements and Supplementary Data

         Consolidated  Financial  Statements  of the Company,  together with the
reports  thereon of Grant Thornton LLP (dated February 8, 2001) are set forth on
pages F-1 hereof (see Item 14 of this Annual Report for Index).

Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial disclosure.

         Not Applicable.

                                    PART III

Item  10.  Directors,   Executive  Officers,   Promoters  and  Control  Persons;
           Compliance With Section 16(a) of the Exchange Act.

         The  information  is  contained  under  "Ownership  of Common  Stock by
Management"  and "Election of Directors" in the Company's  Proxy Statement dated
March 13, 2001, is incorporated herein by reference in response to this item.

         The information  contained under  "Compliance With Section 16(a) of the
Securities  Exchange Act" in the Company's Proxy Statement dated March 13, 2001,
is incorporated herein by reference in response to this item.

Item 11.  Executive Compensation.

         The  information  appearing  under  "Executive   Compensation"  in  the
Company's  Proxy  Statement  dated March 13,  2001,  is  incorporated  herein by
reference in response to this item.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

         The information appearing under "Ownership of Common Stock by Principal
Shareholders"  and  "Ownership of Common Stock By  Management"  in the Company's
Proxy  Statement  dated March 13, 2001, is  incorporated  herein by reference in
response to this item.

Item 13.  Certain Relationships and Related Transactions.

         The information appearing under "Certain Transactions" in the Company's
Proxy  Statement  dated March 13, 2001, is  incorporated  herein by reference in
response to this item.

                                     PART IV

Item 14.  Exhibits and Reports on Form 8-K.

(a)      Documents filed as a part of the Report:

         (1)   Report of Grant Thornton LLP, Independent Auditors

               Consolidated Statements of Financial Condition as of December 31,
               2000 and 1999

               Consolidated Statements of Earnings for years ended December 31,
               2000, 1999 and 1998

               Consolidated Statements of Comprehensive Income for years ended
               December 31, 2000, 1999 and 1998

               Consolidated Statements of Stockholder's Equity for years ended
               December 31, 2000, 1999 and 1998

               Consolidated Statements of Cash Flows for years ended December
               31, 2000, 1999 and 1998

               Notes to Consolidated Financial Statements for years ended
               December 31, 2000, 1999 and 1998

(2)      Financial Statement Schedules:

          The  information  is  contained  in the  Company's  Annual  Report  to
     Stockholders  for the year ended December 31, 2000, is incorporated  herein
     by reference in response to this item.

                                      -26-
<PAGE>
(3)      The following are filed as exhibits to this Annual Report on Form 10-K:
<TABLE>
<CAPTION>

         Exhibit
         Number
<S>                                                                            <C>
         *3(a).....................Second Amended and  Restated  Articles of  Incorporation  (reference  is made to Form
                                   SB-2, Exhibit 3(i), File No. 33-096216 and incorporated herein by reference).

         *3(b).....................Restated Code of Regulations  (reference is made to Form SB-2,  Exhibit 3(ii), File No.
                                   33-96216 and incorporated herein by reference).

         *4(a).....................Reference is made to Articles FOURTH, FIFTH, SEVENTH,  EIGHTH,  TENTH AND ELEVENTH of the
                                   Registrant's  Restated Articles of Incorporation  (contained in the Registrant's
                                   Restated  Articles of  Incorporation  filed as Exhibit 3(a) hereto) and Articles
                                   II,  III,  IV, VI and VIII of the  Registrant's  Amended  and  Restated  Code of
                                   Regulations  (contained  in  the  Registrant's  Amended  and  Restated  Code  of
                                   Regulations filed as Exhibit 3(b) hereto).

         *4(b).....................Rights Plan, dated January 23, 1998, between Oak Hill Financial,  Inc., and Fifth Third
                                   Bank,  (reference is made to Exhibit 4.1 to the Form 8-A, filed with the Securities and
                                   Exchange Commission on January 23, 1998 and incorporated herein by reference).

         *4(c).....................Amended Rights Plan, dated December 26, 2000, between Oak Hill Financial, Inc., and
                                   Registrar and Transfer Company, (reference is made to Exhibit 2 to the
                                   Form 8-A12B/A,  filed with the  Securities and Exchange  Commission on
                                   February 21, 2001 and incorporated herein by reference).

         *10(a)....................Oak Hill  Financial,  Inc.  Amended and Restated  1995 Stock Option Plan  (reference is
                                   made to Form  SB-2,  Exhibit  10(a),  File No.  33-96216  and  incorporated  herein  by
                                   reference).

         *10(b)....................Employment  Agreement  between D. Bruce Knox and the Registrant,  dated April 28, 1997,
                                   (reference is made to Form S-4,  Exhibit 10(b),  file No.  333-30349,  and incorporated
                                   herein by reference).

         *10(c)....................Executive Salary  Continuation  Agreement between D. Bruce Knox and Unity Savings Bank,
                                   dated  December  7,  1994,  (reference  is made to Form S-4,  Exhibit  10(c),  file No.
                                   333-30349, and incorporated herein by reference).

         *10(d)....................Executive  Salary  Continuation  Agreement  between George Knox and Unity Savings Bank,
                                   dated  December  7,  1994,  (reference  is made to Form S-4,  Exhibit  10(d),  file No.
                                   333-30349, and incorporated herein by reference).

         *10(e)....................Amendment,  dated  September 18, 1995 to the Executive  Salary  Continuation  Agreement
                                   between  George Knox and Unity  Savings Bank,  (reference is made to Form S-4,  Exhibit
                                   10(e), file No. 333-30349, and incorporated herein by reference).

         *10(f)....................Employment Agreement between Ron J. Copher and The Registrant, dated July 5, 1999.

         *21.......................Subsidiaries  of the Registrant  (reference is made to Form SB-2,  Exhibit 21, File No.
                                   33-96216 and incorporated herein by reference).

          23.......................Consent of Grant Thornton LLP.

          24.......................Powers of Attorney.
</TABLE>

*Incorporated by reference as indicated.

(b)  Form 8-K's Filed in the Fourth Quarter

     1.   Form 8-K,  dated  October  27,  2000,  filed with the  Securities  and
          Exchange Commission on October 27, 2000.

                                       -27-
<PAGE>
                                   SIGNATURES


         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized.


                   OAK HILL FINANCIAL, INC.                          Date

                   By:  /s/ John D. Kidd                        March 13, 2001
                      ---------------------
                      John D. Kidd, President
                      and Chief Executive Officer


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  report  has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>



     Signature                            Title                                             Date

<S>                                          <C>                                            <C>
*  Evan E. Davis                Chairman of the Board                                  March 13, 2001
-----------------------


/s/ John D. Kidd                President, Chief Executive Officer and Director
-----------------------         (Principal Executive Officer)                          March 13, 2001



*  Richard P. LeGrand           Executive Vice President and Director                  March 13, 2001
-----------------------


*  H. Tim Bichsel               Secretary                                              March 13, 2001
-----------------------


*  Ron J. Copher                Chief Financial Officer and Treasurer
-----------------------         (Principal Financial and Accounting Officer)           March 13, 2001



*  Barry M. Dorsey              Director                                               March 13, 2001
-----------------------


*  C. Clayton Johnson           Director                                               March 13, 2001
-----------------------


*  Rick A. McNelly              Director                                               March 13, 2001
-----------------------


*  Donald R. Seigneur           Director                                               March 13, 2001
-----------------------


/s/ H. Grant Stephenson         Director                                               March 13, 2001
-----------------------
</TABLE>




                                      -28-
<PAGE>


<TABLE>
<CAPTION>

    Signature                            Title                                             Date

<S>                                          <C>                                            <C>

*  D. Bruce Knox                       Chief Information Officer and Director             March 13, 2001
-----------------------


*  Ralph E. Coffman, Jr.               Vice President                                     March 13, 2001
-----------------------



*  David G. Ratz                       Chief Administrative Officer                       March 13, 2001
-----------------------


By: /s/ H. Grant Stephenson                                                               March 13, 2001
-----------------------
     H. Grant Stephenson,
     attorney-in-fact for each of
     the persons indicated
</TABLE>


































                                      -29-
<PAGE>

                        CONSOLIDATED FINANCIAL STATEMENTS







                 TABLE OF CONTENTS

                 Financial Condition.............................F-2

                 Earnings........................................F-3

                 Stockholders' Equity............................F-4

                 Comprehensive Income............................F-5

                 Cash Flows......................................F-6

                 Notes...........................................F-8













                                      F-1
<PAGE>
                            Oak Hill Financial, Inc.
<TABLE>
<CAPTION>
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                  December 31,
                        (In thousands, except share data)

                                                                                       2000                           1999


ASSETS
<S>                                                                                   <C>                            <C>
Cash and due from banks                                                          $   13,224                     $   14,675
Federal funds sold                                                                       77                          3,854
Investment securities designated as available for sale-- at market                   56,323                         53,338
Investment securities held to maturity -- at cost (approximate market
  value of  $4,598 at December 31, 2000)                                              4,947                             --
Loans receivable-- net                                                              598,903                        507,726
Loans held for sale-- at lower of cost or market                                        183                            243
Office premises and equipment-- net                                                   9,296                          9,256
Federal Home Loan Bank stock-- at cost                                                4,981                          4,079
Accrued interest receivable on loans                                                  3,525                          2,764
Accrued interest receivable on investment securities                                    688                            829
Goodwill-- net                                                                          249                            283
Prepaid expenses and other assets                                                       715                            312
Prepaid federal income taxes                                                            625                          1,220
Deferred federal income taxes                                                           901                          1,521
                                                                                    -------                        -------

      TOTAL ASSETS                                                                 $694,637                       $600,100
                                                                                    =======                        =======

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits
   Demand                                                                         $  45,792                      $  42,598
   Savings and time deposits                                                        516,825                        446,282
                                                                                    -------                        -------

      Total deposits                                                                562,617                        488,880

Securities sold under agreement to repurchase                                           143                          1,172
Advances from the Federal Home Loan Bank                                             70,152                         59,680
Notes payable                                                                         2,300                             --
Subordinated debentures                                                               5,000                             --
Accrued interest payable and other liabilities                                        4,529                          2,644
                                                                                    -------                        -------

      Total liabilities                                                             644,741                        552,376

Stockholders' equity
   Common stock -- $.50 stated value; authorized 15,000,000 shares, 5,414,576
      and 5,369,576 shares issued at December 31, 2000 and 1999                       2,707                          2,683
   Additional paid-in capital                                                         5,040                          4,650
   Retained earnings                                                                 46,913                         42,724
   Treasury stock (304,470 and 50,900 shares at cost
       at December 31, 2000 and 1999)                                                (4,680)                          (755)
   Accumulated comprehensive loss:
       Unrealized loss on securities designated as available
         for sale, net of related tax effects                                           (84)                        (1,578)
                                                                                    -------                       -------

      Total stockholders' equity                                                     49,896                         47,724
                                                                                    -------                        -------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                   $694,637                       $600,100
                                                                                    =======                        =======
</TABLE>






        The accompanying notes are an integral part of these statements.

                                      F-2
<PAGE>


                            Oak Hill Financial, Inc.
<TABLE>
<CAPTION>
                       CONSOLIDATED STATEMENTS OF EARNINGS
                             Year ended December 31,
                        (In thousands, except share data)

                                                                        2000                   1999                   1998
<S>                                                                    <C>                     <C>                   <C>
INTEREST INCOME

   Loans                                                             $50,362                $39,431                $37,049
   Investments
      U.S. Government and agency securities                            3,316                  4,792                  3,635
      Obligations of state and political subdivisions                    162                    416                    194
      Other securities                                                   642                     --                     --
      Federal funds sold                                                  62                    587                    661
      Interest-bearing deposits                                           34                     24                     60
                                                                      ------                 ------                 ------
         Total interest income                                        54,578                 45,250                 41,599

INTEREST EXPENSE

   Deposits                                                           24,764                 19,426                 19,395
   Borrowings                                                          4,746                  2,993                  1,944
                                                                      ------                 ------                 ------
         Total interest expense                                       29,510                 22,419                 21,339
                                                                      ------                 ------                 ------

         Net interest income                                          25,068                 22,831                 20,260

   Less provision for losses on loans                                  2,263                  2,432                  1,266
                                                                      ------                 ------                 ------
         Net interest income after provision for losses on loans      22,805                 20,399                 18,994

OTHER INCOME

   Service fees, charges and other operating                           2,521                  2,072                  1,550
   Gain on sale of loans                                                 174                    477                  1,418
   Gain (loss) on sale of assets                                        (390)                (2,141)                   281
                                                                      ------                 ------                 ------
         Total other income                                            2,305                    408                  3,249

GENERAL, ADMINISTRATIVE AND OTHER EXPENSE

   Employee compensation and benefits                                  8,880                  7,635                  6,448
   Occupancy and equipment                                             1,909                  1,665                  1,673
   Federal deposit insurance premiums                                    100                    126                    117
   Franchise taxes                                                       531                    544                    572
   Other operating                                                     4,200                  3,535                  2,978
   Merger-related expenses                                                --                  1,137                     --
                                                                      ------                 ------                 ------
         Total general, administrative and other expense              15,620                 14,642                 11,788
                                                                      ------                 ------                 ------

         Earnings before federal income taxes                          9,490                  6,165                 10,455

FEDERAL INCOME TAXES

   Current                                                             3,321                  2,465                  3,370
   Deferred                                                             (149)                  (382)                    45
                                                                      ------                 ------                 ------
         Total federal income taxes                                    3,172                  2,083                  3,415
                                                                      ------                 ------                 ------

         NET EARNINGS                                                $ 6,318                $ 4,082                $ 7,040
                                                                      ======                 ======                 ======

         EARNINGS PER SHARE

            Basic                                                      $1.21                   $.77                  $1.34
                                                                        ====                    ===                   ====
            Diluted                                                    $1.21                   $.76                  $1.30
                                                                        ====                    ===                   ====
</TABLE>



        The accompanying notes are an integral part of these statements.

                                      F-3
<PAGE>


                            Oak Hill Financial, Inc.
<TABLE>
<CAPTION>
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
              For the years ended December 31, 2000, 1999 and 1998
                        (In thousands, except share data)

                                                                                                    Unrealized
                                                                                                  gains (losses)
                                                                                       Employee    on securities
                                               Additional                                Stock     designated as
                                       Common    paid-in    Retained     Treasury       Ownership     available
                                       stock     capital   earnings       stock          Plan        for sale       Total
<S>                                    <C>         <C>        <C>           <C>            <C>            <C>         <C>
BALANCE AT JANUARY 1, 1998            $2,195     $4,017     $35,219        $   (28)        $ (45)       $   (9)      $41,349

Stock dividend effected in the form
   of a 5-for-4 stock split              440         --        (440)            --            --            --            --
Issuance of 13,188 shares under stock
   option plan                             6        108          --             --            --            --           114
Dividends declared of $.263 per share     --         --      (1,385)            --            --            --        (1,385)
Repurchase of 36,900 shares               --         --          --           (727)           --            --          (727)
Principal repayments on loan of ESOP      --         --          --             --            30            --            30
Unrealized gains on securities designated
  as available for sale, net of related
  tax effects                             --         --          --             --            --           153           153
Net earnings for the year                 --         --       7,040             --            --            --         7,040
                                       -----      -----      ------         ------          ----         -----        ------

BALANCE AT DECEMBER 31, 1998           2,641      4,125      40,434           (755)          (15)          144        46,574

Issuance of 83,875 shares under stock
   option plan                            42        525          --             --            --            --           567
Dividends declared of $.339 per share     --         --      (1,792)            --            --            --        (1,792)
Principal repayments on loan of ESOP      --         --          --             --            15            --            15
Unrealized losses on securities
  designated as available for sale,
   net of related tax effects             --         --          --             --            --        (1,722)       (1,722)
Net earnings for the year                 --         --       4,082             --            --            --         4,082
                                       -----      -----      ------         ------          ----         -----        ------

BALANCE AT DECEMBER 31, 1999           2,683      4,650      42,724           (755)           --        (1,578)       47,724

Issuance of 45,000 shares under stock
   option plan                            24        390          --             --            --            --           414
Dividends declared of $.407 per share     --         --      (2,129)            --            --            --        (2,129)
Repurchase of 257,470 shares              --         --          --         (3,925)           --            --        (3,925)
Unrealized gains on securities
  designated as available for sale,
  net of related tax effects              --         --          --             --            --         1,494         1,494
Net earnings for the year                 --         --       6,318             --            --            --         6,318
                                       -----      -----      ------         ------          ----         -----        ------

BALANCE AT DECEMBER 31, 2000          $2,707     $5,040     $46,913        $(4,680)        $  --        $  (84)      $49,896
                                       =====      =====      ======         ======          ====         =====        ======
</TABLE>







        The accompanying notes are an integral part of these statements.

                                      F-4
<PAGE>


                            Oak Hill Financial, Inc.
<TABLE>
<CAPTION>
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
              For the years ended December 31, 2000, 1999 and 1998
                                 (In thousands)

                                                                        2000                   1999                   1998
<S>                                                                     <C>                    <C>                    <C>

Net earnings                                                          $6,318                $ 4,082                 $7,040

Other comprehensive income, net of tax:

   Unrealized gains (losses) on securities
        designated as available for sale, net of taxes (benefits)
        of $640, $(1,615) and $174 in 2000, 1999
        and 1998, respectively                                         1,242                 (3,135)                   338
   Reclassification adjustment for realized
        (gains) losses included in net earnings, net of
        taxes (benefits) of $(129), $(728) and $96
        in 2000, 1999 and 1998, respectively                             252                  1,413                   (185)
                                                                       -----                 ------                  -----

Comprehensive income                                                  $7,812                $ 2,360                 $7,193
                                                                       =====                 ======                  =====

Accumulated comprehensive income (loss)                               $  (84)               $(1,578)                $  144
                                                                       =====                 ======                  =====
</TABLE>




























        The accompanying notes are an integral part of these statements.

                                      F-5
<PAGE>
                            Oak Hill Financial, Inc.
<TABLE>
<CAPTION>
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             Year ended December 31,
                                 (In thousands)

                                                                        2000                   1999                   1998

<S>                                                                    <C>                   <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

   Net earnings for the year                                        $  6,318               $  4,082               $  7,040
   Adjustments to reconcile net earnings to net cash
   provided by (used in) operating activities:
      Depreciation and amortization                                      838                    769                    835
      (Gain) loss on sale of securities                                  381                  2,167                   (277)
      Amortization of premiums and discounts
         on investment securities-- net                                   35                    187                    158
      Proceeds from sale of loans in secondary market                 10,658                 30,638                 78,727
      Loans disbursed for sale in secondary market                   (10,509)               (27,922)               (79,192)
      Gain on sale of loans                                              (89)                  (252)                  (684)
      (Gain) loss on disposition of assets                                 9                    (26)                    (4)
      Loss on impairment of office premises                              185                     --                     --
      Amortization of deferred loan origination costs                    174                    333                    320
      Federal Home Loan Bank stock dividends                            (335)                  (398)                  (253)
      Provision for losses on loans                                    2,263                  2,432                  1,266
      Amortization of goodwill                                            34                     34                     33
      Increase (decrease) in cash due to changes in:
         Prepaid expenses and other assets                              (340)                   401                   (187)
         Accrued interest receivable                                    (620)                   (10)                  (503)
         Accrued interest payable and other liabilities                1,885                   (359)                   241
         Federal income taxes
            Current                                                      595                 (1,050)                  (291)
            Deferred                                                    (149)                  (382)                    45
                                                                     -------                -------                -------

               Net cash provided by operating activities              11,333                 10,644                  7,274

CASH FLOWS PROVIDED BY (USED IN)
INVESTING ACTIVITIES:

   Loan disbursements                                               (293,153)              (296,845)              (250,914)
   Principal repayments on loans                                     198,789                194,937                200,035
   Principal repayments on mortgage-backed securities
     designated as available for sale                                  1,896                  3,929                  4,509
   Principal repayments on mortgage-backed securities
     designated as held-to-maturity                                       --                  3,615                  2,844
   Proceeds from sale of investment securities designated
      as available for sale                                           21,673                 41,014                 12,784
   Proceeds from maturity of investment securities                       755                 14,885                 36,881
   Proceeds from sale of assets                                          720                     --                      4
   Purchase of investment securities designated as
      available for sale                                             (25,462)               (21,011)               (70,735)
   Purchase of investment securities designated as
      held-to-maturity                                                (4,947)                (1,039)                (4,739)
   (Increase) decrease in federal funds sold-- net                     3,777                  7,533                 (5,914)
   Purchase of Federal Home Loan Bank stock                             (567)                    --                    --
   Purchase of office premises and equipment                          (1,105)                (2,073)                (1,932)
   Decrease in certificates of deposit in other
      institutions                                                        --                      1                    177
   Redemption of cash surrender value of life insurance-- net             --                     --                    591
                                                                     -------                -------                -------

               Net cash used in investing activities                 (97,624)               (55,054)               (76,409)
                                                                     -------                -------                -------

               Net cash used in operating and investing
                  activities (balance carried forward)               (86,291)               (44,410)               (69,135)
                                                                     -------                -------                -------
</TABLE>


                                      F-6
<PAGE>


                            Oak Hill Financial, Inc.
<TABLE>
<CAPTION>
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                             Year ended December 31,
                                 (In thousands)

                                                                        2000                   1999                   1998

<S>                                                                   <C>                      <C>                    <C>
               Net cash used in operating and investing
                  activities (balance brought forward)            $  (86,291)            $  (44,410)              $(69,135)

CASH FLOWS PROVIDED BY (USED IN)
FINANCING ACTIVITIES:

   Proceeds (repayments) from securities sold under
     agreement to repurchase                                          (1,029)                   232                    682
   Net increase in deposit accounts                                   73,737                 23,206                 74,409
   Proceeds from Federal Home Loan Bank advances                   3,251,616              1,518,512                 25,500
   Repayment of Federal Home Loan Bank advances                   (3,241,144)            (1,495,290)               (26,447)
   Proceeds from notes payable                                         2,800                     --                     --
   Repayment of notes payable                                           (500)                    --                     --
   Advances by borrowers for taxes and insurance                          --                     --                     45
   Accounts payable on mortgage loans serviced                            --                     --                    122
   Proceeds from issuance of debt securities                           5,000                     --                     --
   Dividends on common shares                                         (2,129)                (1,792)                (1,385)
   Purchase of treasury stock                                         (3,925)                   --                    (727)
   Proceeds from issuance of shares under stock option plan              414                    567                    114
                                                                   ---------              ---------                -------

               Net cash provided by financing activities              84,840                 45,435                 72,313
                                                                   ---------              ---------                -------

Net increase (decrease) in cash and cash equivalents                  (1,451)                 1,025                  3,178

Cash and cash equivalents at beginning of year                        14,675                 13,650                 10,472
                                                                   ---------              ---------                -------

Cash and cash equivalents at end of year                          $   13,224             $   14,675               $ 13,650
                                                                   =========              =========                =======

SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:

Cash paid during the year for:
   Federal income taxes                                           $    3,363             $    3,417              $  3,491
                                                                   =========              =========               =======

   Interest on deposits and borrowings                            $   28,366             $   22,326              $ 21,271
                                                                   =========              =========               =======

SUPPLEMENTAL DISCLOSURE OF
NONCASH INVESTING ACTIVITIES:

   Unrealized gains (losses) on securities designated as
      available for sale, net of related tax effects              $    1,494             $   (1,722)              $    153
                                                                   =========              =========                =======

   Recognition of mortgage servicing rights in
      accordance with SFAS No. 125                                $       85             $      225               $    734
                                                                   =========              =========                =======

   Transfers from loans to real estate acquired
      through foreclosure                                         $      779             $      278               $     51
                                                                   =========              =========                =======

   Transfer of loans from held for investment to
      held for sale                                               $       --             $       --               $    820
                                                                   =========              =========                =======
</TABLE>







        The accompanying notes are an integral part of these statements.

                                      F-7
<PAGE>


                            Oak Hill Financial, Inc.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              For the years ended December 31, 2000, 1999 and 1998


NOTE A -- SUMMARY OF ACCOUNTING POLICIES

         The business  activities of Oak Hill Financial,  Inc.  ("Company") have
been  limited  primarily  to holding  the common  shares of Oak Hill Banks ("Oak
Hill")  and  Towne  Bank  ("Towne"),  (collectively  hereinafter  the  "Banks").
Accordingly,  the Company's results of operations are dependent upon the results
of the  Banks'  operations.  The  Banks  conduct a  general  commercial  banking
business in southern and central Ohio which consists of attracting deposits from
the general  public and  applying  those funds to the  origination  of loans for
commercial,  consumer and  residential  purposes.  The Banks'  profitability  is
significantly  dependent on net interest income, which is the difference between
interest  income  generated  from  interest-earning   assets  (i.e.,  loans  and
investments)  and the  interest  expense  paid on  interest-bearing  liabilities
(i.e., customer deposits and borrowed funds). Net interest income is affected by
the relative amount of interest-earning assets and interest-bearing  liabilities
and the interest received or paid on these balances. The level of interest rates
paid or received by the Banks' can be  significantly  influenced  by a number of
competitive factors,  such as governmental  monetary policy, that are outside of
management's control.

         On  October  1,  1999,  the  Company   combined  with  Towne  Financial
Corporation  ("Towne  Financial")  and its  wholly-owned  subsidiary,  Blue  Ash
Building and Loan Company ("Blue Ash") in a transaction  whereby Towne Financial
merged  with and into the  Company and Blue Ash,  renamed  Towne Bank,  became a
wholly-owned  subsidiary of the Company.  The transaction was accounted for as a
pooling-of-interests. Accordingly, the consolidated financial statements for the
year ended  December 31, 1998,  have been restated to reflect the effects of the
business  combination as of January 1, 1998.  Pursuant to the merger  agreement,
the Company  issued 917,361 shares of common stock in exchange for the shares of
Towne Financial.

         The  consolidated  financial  information  presented  herein  has  been
prepared in accordance with generally accepted  accounting  principles  ("GAAP")
and general  accounting  practices within the financial  services  industry.  In
preparing financial  statements in accordance with GAAP,  management is required
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent  assets and liabilities at the date
of the  financial  statements  and revenues and  expenses  during the  reporting
period. Actual results could differ from such estimates.

         The  following  is a summary of the  Company's  significant  accounting
policies  which  have  been  consistently  applied  in  the  preparation  of the
accompanying consolidated financial statements.

1.   PRINCIPLES OF CONSOLIDATION

         The  consolidated  financial  statements  include  the  accounts of the
Company and its  wholly-owned  subsidiaries,  Oak Hill, Towne and Action Finance
Company  ("Action").  Action was  incorporated  for the  purpose  of  conducting
consumer finance lending  operations.  Action began such operations during 1998.
All significant intercompany balances and transactions have been eliminated.

2.   INVESTMENT SECURITIES

         The Company  accounts for  investment  securities  in  accordance  with
Statement of Financial  Accounting  Standards  ("SFAS") No. 115  "Accounting for
Certain  Investments in Debt and Equity  Securities." SFAS No. 115 requires that
investments be categorized as held to maturity,  trading, or available for sale.
Securities  classified  as held to  maturity  are  carried  at cost  only if the
Company  has the  positive  intent  and  ability  to hold  these  securities  to
maturity.  Trading  securities and securities  available for sale are carried at
fair value with resulting  unrealized  gains or losses recorded to operations or
stockholders' equity, respectively. At December 31, 2000 and 1999, the Company's
stockholders' equity reflected net unrealized losses on securities designated as
available for sale,  net of applicable  tax effects,  totaling  $84,000 and $1.6
million, respectively.

Realized  gains  and  losses on sales of  securities  are  recognized  using the
specific identification method.

                                      F-8
<PAGE>


                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998


3.   LOANS RECEIVABLE

         Loans held in portfolio are stated at the principal amount outstanding,
adjusted  for  premiums  and  discounts  on  loans  purchased  and  sold and the
allowance for loan losses.  Premiums and  discounts on loans  purchased and sold
are  amortized  and accreted to  operations  using the interest  method over the
average life of the underlying loans.

         Interest is accrued as earned unless the  collectibility of the loan is
in doubt.  Uncollectible  interest on loans that are  contractually  past due is
charged off, or an  allowance  is  established  based on  management's  periodic
evaluation. The allowance is established by a charge to interest income equal to
all interest previously accrued,  and income is subsequently  recognized only to
the extent that cash payments are received until, in management's  judgment, the
borrower's ability to make periodic interest and principal payments has returned
to normal, in which case the loan is returned to accrual status.

         Loans  held for  sale  are  carried  at the  lower  of cost or  market,
determined in the aggregate.  Loans held for sale are identified at the point of
origination.  In computing  lower of cost or market,  deferred loan  origination
fees are deducted from the principal balance of the related loan. All loan sales
are made without  further  recourse to the Banks. At December 31, 2000 and 1999,
loans held for sale were carried at cost.

         The Banks generally  retain  servicing on loans sold and agree to remit
to the investor  loan  principal  and interest at  agreed-upon  rates.  Mortgage
servicing  rights are accounted for pursuant to the  provisions of SFAS No. 125,
"Accounting for Transfers and Servicing of Financial Assets and  Extinguishments
of  Liabilities,"  which requires that the Banks  recognize as separate  assets,
rights to service  mortgage loans for others,  regardless of how those servicing
rights are acquired.  An institution  that acquires  mortgage  servicing  rights
through  either the purchase or  origination  of mortgage  loans and sells those
loans with servicing rights retained must allocate some of the cost of the loans
to the mortgage servicing rights.

         SFAS No. 125 requires that  capitalized  mortgage  servicing rights and
capitalized excess servicing receivables be assessed for impairment.  Impairment
is measured based on fair value.  The mortgage  servicing rights recorded by the
Banks,  calculated  in  accordance  with the  provisions  of SFAS No. 125,  were
segregated into pools for valuation purposes, using as pooling criteria the loan
term and coupon rate.  Once pooled,  each  grouping of loans was  evaluated on a
discounted earnings basis to determine the present value of future earnings that
a purchaser could expect to realize from each portfolio. Earnings were projected
from a variety of sources  including loan  servicing  fees,  interest  earned on
float,  net  interest  earned on  escrows,  miscellaneous  income,  and costs to
service the loans.  The present value of future earnings is the "economic" value
of the pool,  i.e.,  the net  realizable  present  value to an  acquirer  of the
acquired servicing.

         The Banks recorded  amortization  related to mortgage  servicing rights
totaling  approximately  $60,000,  $174,000  and  $112,000  for the years  ended
December 31, 2000, 1999 and 1998,  respectively.  At December 31, 2000 and 1999,
the  carrying  value and fair  value of the  Banks'  mortgage  servicing  rights
totaled approximately $964,000 and $1.0 million, respectively.

4.   LOAN ORIGINATION AND COMMITMENT FEES

The Company accounts for loan origination fees and costs in accordance with SFAS
No. 91, "Accounting for Nonrefundable Fees and Costs Associated with Originating
or  Acquiring  Loans  and  Initial  Direct  Costs of  Leases".  Pursuant  to the
provisions of SFAS No. 91, all loan  origination  fees received,  net of certain
direct  origination costs, are deferred on a loan-by-loan basis and amortized to
interest  income  using the  interest  method,  giving  effect  to  actual  loan
prepayments.  Additionally,  SFAS No. 91 generally limits the definition of loan
origination costs to the direct costs  attributable to originating a loan, i.e.,
principally actual personnel costs.

         Fees received for loan  commitments are deferred and amortized over the
life of the related loan using the interest method.

5.   ALLOWANCE FOR LOAN LOSSES

         It  is  the  Company's  policy  to  provide  valuation  allowances  for
estimated losses on loans based upon past loss  experience,  trends in the level
of delinquent and specific problem loans, adverse situations that may affect the
borrower's  ability to repay,  the estimated value of any underlying  collateral
and current and anticipated economic conditions in the Banks'

                                      F-9
<PAGE>

                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998


primary  market  areas.  When the  collection  of a loan  becomes  doubtful,  or
otherwise  troubled,  the  Company  records a loan loss  provision  equal to the
difference  between  the fair value of the  property  securing  the loan and the
loan's  carrying  value.  Major  loans and  major  lending  areas  are  reviewed
periodically to determine potential problems at an early date. The allowance for
loan losses is  increased by charges to earnings  and  decreased by  charge-offs
(net of recoveries).

         The Company  accounts for impaired  loans in  accordance  with SFAS No.
114, "Accounting by Creditors for Impairment of a Loan". This Statement requires
that impaired loans be measured based upon the present value of expected  future
cash  flows  discounted  at  the  loan's  effective  interest  rate  or,  as  an
alternative,  at  the  loans  observable  market  price  or  fair  value  of the
collateral.

         A loan is defined under SFAS No. 114 as impaired when, based on current
information and events, it is probable that a creditor will be unable to collect
all amounts due according to the  contractual  terms of the loan  agreement.  In
applying the provisions of SFAS No. 114, the Company considers its investment in
one-to-four family residential loans, consumer installment loans and credit card
loans to be homogeneous and therefore excluded from separate  identification for
evaluation of impairment. With respect to the Company's investment in commercial
and other  loans,  and its  evaluation  of  impairment  thereof,  such loans are
collateral dependent and as a result are carried as a practical expedient at the
lower of cost or fair value.

         It is the  Company's  policy to charge off  unsecured  credits that are
more than ninety days delinquent.  Similarly,  collateral  dependent loans which
are more than ninety days  delinquent are  considered to constitute  more than a
minimum delay in repayment and are evaluated for  impairment  under SFAS No. 114
at that time.

         At December 31, 2000 and 1999,  the Company had  investment in impaired
loans,  as defined  under SFAS No.  114,  totaling  approximately  $695,000  and
$65,000,  respectively.  The Company  maintained  an allowance for credit losses
related to such  impaired  loans of $460,000  and $20,000 for the periods  ended
December 31, 2000 and 1999, respectively.

6.   OFFICE PREMISES AND EQUIPMENT

         Depreciation  and amortization  are provided on the  straight-line  and
accelerated methods over the estimated useful lives of the assets,  estimated to
be ten to fifty years for buildings and  improvements  and three to  twenty-five
years for furniture, fixtures and equipment.

7.   REAL ESTATE ACQUIRED THROUGH FORECLOSURE

         Real estate acquired through foreclosure is carried at the lower of the
loan's unpaid  principal  balance  (cost) or fair value less  estimated  selling
expenses at the date of acquisition.  The loan loss allowance is charged for any
write  down  in  the  loan's  carrying  value  to  fair  value  at the  date  of
acquisition.  Real estate loss provisions are recorded if the  properties'  fair
value subsequently declines below the value determined at the recording date. In
determining  the lower of cost or fair value at  acquisition,  costs relating to
development  and  improvement  of property  are  considered.  Costs  relating to
holding real estate  acquired  through  foreclosure,  net of rental income,  are
charged against earnings as incurred.

8.   FEDERAL INCOME TAXES

         The Company accounts for federal income taxes pursuant to SFAS No. 109,
"Accounting for Income Taxes."

         Pursuant to the provisions of SFAS No. 109, a deferred tax liability or
deferred  tax asset is computed by applying the current  statutory  tax rates to
net  taxable or  deductible  temporary  differences  between the tax basis of an
asset  or  liability  and its  reported  amount  in the  consolidated  financial
statements that will result in taxable or deductible  amounts in future periods.
Deferred  tax assets  are  recorded  only to the  extent  that the amount of net
deductible  temporary  differences  or  carryforward  attributes may be utilized
against  current  period  earnings,  carried back against prior years  earnings,
offset against taxable  temporary  differences  reversing in future periods,  or
utilized to the extent of  management's  estimate of future  taxable  income.  A
valuation  allowance  is provided for deferred tax assets to the extent that the
value  of net  deductible  temporary  differences  and  carryforward  attributes
exceeds  management's  estimates  of taxes  payable  on future  taxable  income.
Deferred  tax  liabilities  are  provided on the total  amount of net  temporary
differences taxable in the future.

                                      F-10
<PAGE>

                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998


         The Company's principal temporary  differences between pretax financial
income  and  taxable  income  result  primarily  from the  different  methods of
accounting for deferred loan origination fees and costs,  Federal Home Loan Bank
stock dividends,  capitalized  mortgage servicing rights,  certain components of
retirement expense and the allowance for loan losses. A temporary  difference is
also recognized for depreciation  expense computed using accelerated methods for
federal income tax purposes.

9.   AMORTIZATION OF GOODWILL

         Goodwill  arising from an acquisition is being  amortized to operations
using  the  straight-line   method  over  a  fifteen  year  period.   Management
periodically  evaluates  the  carrying  value of  goodwill  in  relation  to the
continuing earnings capacity of the acquired assets and assumed liabilities.

10.   FAIR VALUE OF FINANCIAL INSTRUMENTS

         SFAS No. 107, "Disclosures about Fair Value of Financial  Instruments",
requires  disclosure  of fair value of  financial  instruments,  both assets and
liabilities whether or not recognized in the consolidated statement of financial
condition,  for which it is  practicable  to estimate that value.  For financial
instruments where quoted market prices are not available,  fair values are based
on estimates using present value and other valuation methods.

         The methods  used are  greatly  affected  by the  assumptions  applied,
including the discount rate and estimates of future cash flows.  Therefore,  the
fair values  presented  may not  represent  amounts that could be realized in an
exchange  for  certain   financial   instruments.   The  following  methods  and
assumptions  were used by the Company in estimating  its fair value  disclosures
for financial instruments at December 31, 2000 and 1999.

         Cash  and cash  equivalents.  The  carrying  amounts  presented  in the
consolidated statements of financial condition for cash and cash equivalents are
deemed to approximate fair value.

         Federal funds sold. The carrying amounts  presented in the consolidated
statements  of  financial  condition  for  federal  funds  sold  are  deemed  to
approximate fair value.

         Investment securities. For investment securities,  fair value is deemed
to equal the quoted market price.

         Loans   receivable.   The  loan  portfolio  has  been  segregated  into
categories with similar characteristics,  such as one-to-four family residential
real estate,  multi-family residential real estate, commercial,  installment and
other.  These loan  categories  were  further  delineated  into  fixed-rate  and
adjustable-rate  loans.  The fair values for the resultant loan  categories were
computed via discounted cash flow analysis, using current interest rates offered
for loans with  similar  terms to  borrowers  of  similar  credit  quality.  The
historical carrying amount of accrued interest on loans is deemed to approximate
fair value.

         Federal  Home Loan Bank stock.  The  carrying  amount  presented in the
consolidated  statements of financial  condition is deemed to  approximate  fair
value.

         Deposits.  The fair value of NOW  accounts,  savings  accounts,  demand
deposits,  money  market  deposits and other  transaction  accounts is deemed to
approximate  the amount  payable on demand at December  31, 2000 and 1999.  Fair
values for  fixed-rate  certificates  of  deposit  have been  estimated  using a
discounted cash flow calculation  using the interest rates currently offered for
deposits of similar remaining maturities.

         Advances  from the Federal  Home Loan Bank.  The fair value of advances
from the Federal Home Loan Bank has been estimated  using  discounted  cash flow
analysis,  based on the interest rates currently offered for advances of similar
remaining maturities.

         Securities sold under agreement to repurchase.  The carrying amounts of
securities  sold under  agreements to repurchase is deemed to  approximate  fair
value.

                                      F-11
<PAGE>

                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998


         Notes payable. The fair value of notes payable has been estimated using
discounted cash flow analysis, based on the interest rates currently offered for
notes of similar remaining maturities.

         Subordinated   debentures.   The  fair   value  of  the   Corporation's
subordinated  debentures has been estimated using discounted cash flow analysis,
based on the  interest  rates  currently  offered  for  instruments  of  similar
remaining maturities.

         Commitments to extend credit. For fixed-rate and  adjustable-rate  loan
commitments,  the fair value estimate  considers the difference  between current
levels of interest rates and committed  rates.  The difference  between the fair
value and notional amount of outstanding  loan  commitments at December 31, 2000
and 1999, was not material.

         Based on the foregoing methods and assumptions,  the carrying value and
fair value of the Company's financial instruments are as follows:
<TABLE>
<CAPTION>

                                                                                               December 31,

2000                                                          1999
                                                          Carrying          Fair                   Carrying         Fair
                                                            value           value                    value          value
                                                                                   (In thousands)
<S>                                                         <C>            <C>                      <C>             <C>
Financial assets
   Cash and due from banks                               $ 13,224        $ 13,224                 $ 14,675        $ 14,675
   Federal funds sold                                          77              77                    3,854           3,854
   Investment securities                                   61,270          60,921                   53,338          53,338
   Loans receivable                                       599,086         597,739                  507,969         507,377
   Federal Home Loan Bank stock                             4,981           4,981                    4,079           4,079
                                                          -------         -------                  -------        -------

                                                         $678,638        $676,942                 $583,915        $583,323
                                                          =======         =======                  =======         =======

Financial liabilities
   Deposits                                              $562,617        $563,753                 $488,880        $488,936
   Advances from the Federal
     Home Loan Bank                                        70,152          70,148                   59,680          59,474
   Securities sold under agreement to repurchase              143             143                    1,172           1,172
   Notes payable                                            2,300           2,300                       --              --
   Subordinated debentures                                  5,000           5,072                       --              --
                                                          -------         -------                  -------         -------

                                                         $640,212        $641,416                 $549,732        $549,582
                                                          =======         =======                  =======         =======
</TABLE>

11.   EARNINGS PER SHARE

         Basic  earnings per share is computed  based upon the  weighted-average
shares outstanding during the year.  Weighted-average  common shares outstanding
totaled  5,226,889,  5,290,140,  and 5,258,180 for the years ended  December 31,
2000,  1999,  and 1998,  respectively.  Diluted  earnings  per share is computed
taking into  consideration  common  shares  outstanding  and dilutive  potential
common   shares  to  be  issued   under  the   Company's   stock   option  plan.
Weighted-average  common  shares  deemed  to  be  outstanding  for  purposes  of
computing diluted earnings per share totaled 5,227,938, 5,403,130, and 5,404,684
for the years ended December 31, 2000, 1999, and 1998, respectively.

         There were 1,049,  112,990,  and 146,504  incremental shares related to
the assumed  exercise of stock options  included in the  computation  of diluted
earnings  per  share for the  years  ended  December  31,  2000,  1999 and 1998,
respectively.  Options to purchase  435,875 and 152,875  shares of common  stock
with a  respective  weighted-average  exercise  price of $17.12 and $16.62  were
outstanding at December 31, 2000 and 1999, respectively,  but were excluded from
the computation of common share  equivalents  because their exercise prices were
greater than the average market price of the common shares.

                                      F-12
<PAGE>

                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998


12.   CAPITALIZATION

         The Company's  authorized  capital stock includes  1,500,000  shares of
$.01 per share par value voting preferred stock and 1,500,000 shares of $.01 per
share par value non-voting preferred stock. No preferred shares have been issued
at December 31, 2000 and 1999.

13.   ADVERTISING

         Advertising costs are expensed when incurred. The Company's advertising
expense totaled  $311,000,  $370,000,  and $339,000 for the years ended December
31, 2000, 1999 and 1998, respectively.

14.   CASH AND CASH EQUIVALENTS

         For purposes of reporting  cash flows,  cash and cash  equivalents  are
comprised of cash and due from banks.

15.   RECLASSIFICATIONS

         Certain  prior year  amounts have been  reclassified  to conform to the
2000 consolidated financial statement presentation.

NOTE B -- INVESTMENT SECURITIES

         The amortized cost, gross unrealized gains, gross unrealized losses and
estimated fair value of investment securities at December 31 are shown below.
<TABLE>
<CAPTION>

                                                                                        2000
                                                                            Gross                    Gross        Estimated
                                                          Amortized      unrealized               unrealized        fair
                                                            cost            gains                   losses          value
                                                                                   (In thousands)
<S>                                                         <C>             <C>                       <C>             <C>
Held to maturity:

Trust preferred securities due after ten years            $ 4,947           $  --                     $349         $ 4,598
                                                           ======            ====                      ===          ======

Available for sale:

U.S Government and agency obligations                     $49,536            $206                     $465         $49,277
Obligations of state and political subdivisions             6,916             134                        4           7,046
                                                           ------             ---                      ---          ------

               Total securities available for sale        $56,452            $340                     $469         $56,323
                                                           ======             ===                      ===          ======
</TABLE>



<TABLE>
<CAPTION>
                                                                                        1999
                                                                            Gross                    Gross        Estimated
                                                          Amortized      unrealized               unrealized        fair
                                                            cost            gains                   losses          value
                                                                                   (In thousands)
<S>                                                          <C>            <C>                     <C>             <C>
Available for sale:

U.S Government and agency obligations                     $52,314            $  6                   $2,384         $49,936
Obligations of state and political subdivisions             3,414              14                       26           3,402
                                                           ------             ---                    -----          ------

               Total securities available for sale        $55,728            $ 20                   $2,410         $53,338
                                                           ======             ===                    =====          ======
</TABLE>


         The amortized  cost and estimated  fair value of investment  securities
designated  as available for sale, by term to maturity at December 31, are shown
below.

                                      F-13
<PAGE>

                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998


<TABLE>
<CAPTION>

2000                                                         1999
                                                                          Estimated                               Estimated
                                                          Amortized         fair                   Amortized        fair
                                                            cost            value                    cost           value
                                                                                   (In thousands)
<S>                                                          <C>            <C>                      <C>             <C>
Due in three years or less                                $ 9,016         $ 9,058                  $ 6,796         $ 6,767
Due after three years through five years                    2,546           2,492                    4,825           4,710
Due after five years through ten years                     14,910          14,619                   34,777          32,893
Due after ten years                                        29,980          30,154                    9,330           8,968
                                                           ------          ------                   ------          ------

                                                          $56,452         $56,323                  $55,728         $53,338
                                                           ======          ======                   ======          ======
</TABLE>

         Proceeds from sale of investment securities designated as available for
sale during the year ended December 31, 2000,  totaled $21.7 million,  resulting
in a realized loss of $381,000 on such sales.

         Proceeds  from sales of investment  securities  designated as available
for sale  during  the year ended  December  31,  1999,  totaled  $41.0  million,
resulting in a realized loss of $2.1 million on such sales.

         Proceeds  from sales of investment  securities  designated as available
for sale  during  the year ended  December  31,  1998,  totaled  $12.8  million,
resulting in a realized gain of $277,000 on such sales.

         At December 31, 2000 and 1999,  investment securities with an aggregate
book value of $44.7  million and $48.8  million,  respectively,  were pledged as
collateral for public deposits.

NOTE C -- LOANS RECEIVABLE

         The composition of the loan  portfolio,  including loans held for sale,
is as follows at December 31:
<TABLE>
<CAPTION>

                                                                                     2000               1999
                                                                                        (In thousands)
<S>                                                                                 <C>                <C>
Real estate mortgage (primarily residential)                                     $381,435           $320,033
Installment, net of unearned interest of $2,286 and $2,214                         70,859             66,391
Commercial and other                                                              152,384            126,191
Credit card                                                                         1,605              1,486
                                                                                  -------            -------
                                                                                  606,283            514,101
Less:
     Allowance for loan losses                                                      7,197              6,132
                                                                                  -------            -------

                                                                                 $599,086           $507,969
                                                                                  =======            =======
</TABLE>

         The Company's lending efforts have historically  focused on real estate
mortgages and consumer  installment loans, which comprised  approximately $452.3
million,  or 75.5%,  of the total loan  portfolio  at  December  31,  2000,  and
approximately  $386.4 million, or 76.1%, of the total loan portfolio at December
31, 1999.  Historically,  such loans have been conservatively  underwritten with
sufficient collateral or cash down payments to provide the Company with adequate
collateral coverage in the event of default.  Nevertheless, the Company, as with
any  lending  institution,  is  subject to the risk that real  estate  values or
economic  conditions could deteriorate in its primary lending areas within Ohio,
thereby impairing collateral values.  However,  management is of the belief that
real estate  values and economic  conditions in the  Company's  primary  lending
areas are presently stable.

         As  stated   previously,   the   Company   has  sold  whole  loans  and
participating interests in loans in the secondary market, retaining servicing on
the loans sold. Loans sold and serviced for others totaled  approximately $115.7
million,  $118.1  million,  and $112.2  million at December 31, 2000,  1999, and
1998, respectively.

                                      F-14
<PAGE>

                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998


         The activity in the  allowance for loan losses is summarized as follows
for the years ended December 31:
<TABLE>
<CAPTION>

                                                      2000                   1999                   1998
                                                                        (In thousands)
<S>                                                   <C>                    <C>                   <C>
Balance at beginning of period                      $6,132                 $4,583                 $4,000
Provision charged to operations                      2,263                  2,432                  1,266
Charge-offs                                         (1,413)                (1,115)                  (829)
Recoveries                                             215                    232                    146
                                                     -----                  -----                 -----

Balance at end of period                            $7,197                 $6,132                 $4,583
                                                     =====                  =====                  =====
</TABLE>

         At December 31, 2000,  1999 and 1998,  the Company had  nonaccrual  and
nonperforming loans totaling  approximately $2.9 million,  $3.2 million and $2.4
million,  respectively.  Interest  income  that would have been  recognized  had
nonaccrual loans performed  pursuant to contractual terms totaled  approximately
$262,000,  $287,000 and $162,000 for the years ended December 31, 2000, 1999 and
1998, respectively.

NOTE D -- OFFICE PREMISES AND EQUIPMENT

         Office premises and equipment are summarized at December 31 as follows:
<TABLE>
<CAPTION>

                                                                        2000                   1999
                                                                             (In thousands)
<S>                                                                    <C>                   <C>
Land and buildings                                                   $10,100                $10,163
Furniture and equipment                                                5,154                  4,524
Leasehold improvements                                                   537                    251
                                                                      ------                 ------

                                                                      15,791                 14,938
     Less accumulated depreciation and amortization                   (6,495)                (5,682)
                                                                      ------                 ------

                                                                     $ 9,296                $ 9,256
                                                                      ======                 ======
</TABLE>


NOTE E -- DEPOSITS

         Deposit balances at December 31 are summarized as follows:
<TABLE>
<CAPTION>

Deposit type and                                                     2000                                     1999
interest rate range                                        Amount           Rate                    Amount          Rate
                                                                                (Dollars in thousands)
<S>                                                         <C>              <C>                     <C>              <C>
Demand deposit accounts                                  $ 45,792             --                  $ 42,598             --
Savings accounts                                           40,451           2.65%                   45,901           2.66%
NOW accounts                                               33,996           2.05%                   31,824           2.04%
Money market deposit accounts                              11,041           3.11%                   13,039           3.13%
Premium investment accounts                                47,512           5.81%                   30,150           5.18%
Select investment accounts                                 14,609           4.85%                   12,728           4.10%
                                                          -------                                  -------

Total transaction accounts                                193,401                                  176,240

Certificates of deposit
     2.00-- 4.99%                                          11,838                                   86,208
     5.00-- 6.99%                                         353,726                                  225,869
     7.00-- 8.00%                                           3,652                                      563
                                                          -------                                  -------

Total certificates of deposit                             369,216           6.37%                  312,640           5.35%
                                                          -------                                  -------

Total deposits                                           $562,617           5.17%                 $488,880           4.31%
                                                          =======           ====                   =======           ====
</TABLE>

                                      F-15
<PAGE>
                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998


         The Company had deposit  accounts  with  balances in excess of $100,000
totaling  $179.2  million  and $139.3  million at  December  31,  2000 and 1999,
respectively.

         Interest  expense on  deposits is  summarized  as follows for the years
ended December 31:
<TABLE>
<CAPTION>

                                                       2000                   1999                   1998
                                                                         (In thousands)
<S>                                                   <C>                    <C>                  <C>
NOW accounts                                        $   628                $   635                $   584
Savings accounts                                      1,200                  1,406                  1,457
Money market deposit accounts                           345                    424                    409
Premium investment accounts                           2,020                    994                    993
Select investment accounts                              683                    707                    625
Certificates of deposit                              19,888                 15,260                 15,327
                                                     ------                 ------                 ------

                                                    $24,764                $19,426                $19,395
                                                     ======                 ======                 ======
</TABLE>

         The contractual  maturities of outstanding  certificates of deposit are
summarized as follows at December 31:
<TABLE>
<CAPTION>

                                                                        2000                   1999
                                                                              (In thousands)
<S>                                                                    <C>                   <C>
Less than one year                                                  $321,385               $232,063
One year through three years                                          44,932                 74,220
More than three years                                                  2,899                  6,357
                                                                     -------                -------

                                                                    $369,216               $312,640
                                                                     =======                =======
</TABLE>


NOTE F -- ADVANCES FROM THE FEDERAL HOME LOAN BANK

         Advances  from the Federal Home Loan Bank,  collateralized  at December
31,  2000 and 1999 by pledges of certain  residential  mortgage  loans  totaling
$94.7  million and $89.5  million,  respectively,  and the Banks'  investment in
Federal Home Loan Bank stock, are summarized as follows:
<TABLE>
<CAPTION>

                          Maturing in year December 31,
Interest rate                   ended December 31,                            2000                     1999
                                                                                  (Dollars in thousands)
<S>                                     <C>                                                         <C>                      <C>
5.80% to 6.50%                         2000                                $    --                   $24,159
4.87% to 8.05%                         2001                                 40,956                    13,925
6.43% to 6.50%                         2002                                  4,000                     4,000
       6.50%                           2003                                  2,500                     2,500
7.85% to 8.30%                         2004                                  1,160                     1,485
5.14% to 8.10%                         2005                                  4,006                     4,006
       6.50%                           2006                                    391                       418
       7.30%                           2007                                  4,000                        --
       5.30%                           2009                                    392                     2,505
5.15% to 8.02%                         2010                                  6,860                       976
       6.95%                           2011                                  1,072                     1,262
       7.62%                           2015                                    850                        --
       6.70%                           2017                                    929                       959
       5.15%                           2018                                  3,036                     3,485
                                                                            ------                    ------
                                                                           $70,152                   $59,680
                                                                            ======                    ======
Weighted-average interest rate                                                6.36%                     6.14%
                                                                              ====                      ====
</TABLE>


                                      F-16
<PAGE>


                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998



         Oak Hill has established a relationship  for letters of credit with the
FHLB,  which  totaled $7.2 million at December 31, 2000.  The letters of credit,
which were  unused at  December  31,  2000,  are  collateralized  by a pledge of
certain mortgage loans totaling $9.7 million.  The letters of credit will expire
through July 2001.

NOTE G -- OTHER BORROWINGS

         At December 31, 2000, Action had a $2.3 million note payable to another
financial  institution.  The note matures in 2003,  bears  interest at a rate of
9.00% and is  collateralized by a pledge of a portion of the Company's shares of
Oak Hill.

NOTE H-- SUBORDINATED DEBENTURES

         In March 2000,  a Delaware  trust owned by the Company  (the  "Trust"),
issued  $5.0  million  of  mandatorily  redeemable  debt  securities.  The  debt
securities issued by the Trust are included in the Company's regulatory capital,
specifically as a component of Tier I capital.  The subordinated  debentures are
the sole assets of the Trust, and the Company owns all of the common  securities
of the Trust. Interest payments on the debt securities are made semi-annually at
an annual  fixed  interest  rate of 10.875% and are  reported as a component  of
interest  expense on borrowings.  The net proceeds  received by the Company from
the sale of the  debt  securities  were  used for  general  corporate  purposes,
including  repurchasing the Company's common stock and providing general working
capital.

NOTE I -- FEDERAL INCOME TAXES

         The  provision  for federal  income taxes differs from that computed at
the statutory corporate tax rate for the year ended December 31 as follows:
<TABLE>
<CAPTION>

                                                                        2000                   1999                   1998
                                                                                         (In thousands)
<S>                                                                      <C>                   <C>                    <C>
Federal income taxes computed at the statutory rate                   $3,227                 $2,096                 $3,555
Increase (decrease) in taxes resulting from:
   Interest income on municipal loans and obligations
      of state and political subdivisions                                (75)                  (144)                   (90)
   Amortization of goodwill                                               11                     11                     11
   Nondeductible merger-related expenses                                  --                    102                     --
   Other                                                                   9                     18                    (61)
                                                                       -----                  -----                  -----

Federal income tax provision per consolidated
   financial statements                                               $3,172                 $2,083                 $3,415
                                                                       =====                  =====                  =====
</TABLE>


                                      F-17
<PAGE>


                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998


         The  composition of the Company's net deferred tax asset at December 31
is as follows:
<TABLE>
<CAPTION>

                                                                                2000           1999
                                                                                   (In thousands)
Taxes (payable) refundable on temporary differences at statutory rate:
<S>                                                                             <C>            <C>
Deferred tax assets:
   Book/tax difference of loan loss allowance                                 $2,443         $1,799
   Unrealized losses on securities designated as available for sale               45            812
   Recapture of federal income taxes resulting from loss carrybacks               --            277
   Deferred compensation benefits                                                107             --
   Impairment losses                                                              64             --
   Other                                                                          --              4
                                                                               -----          -----

      Total deferred tax assets                                                2,659          2,892

Deferred tax liabilities:
   Deferred loan origination costs                                              (350)          (281)
   Federal Home Loan Bank stock dividends                                       (532)          (533)
   Book/tax difference of depreciation                                           (94)          (110)
   Mortgage servicing rights                                                    (335)          (323)
   Mark-to-market adjustment                                                    (403)            --
   Book/tax difference on bad debt reserves                                      (44)          (124)
                                                                               -----         ------

      Total deferred tax liabilities                                          (1,758)        (1,371)
                                                                               -----         ------

Net deferred tax asset                                                        $  901         $1,521
                                                                               =====          =====
</TABLE>

         The Company has not recorded a valuation  allowance  for any portion of
the net deferred tax asset at December 31, 2000 and 1999, based on the amount of
income taxes subject to recovery in carryback years.

NOTE J -- RELATED PARTY TRANSACTIONS

         In the normal  course of  business,  the  Company has made loans to its
directors,  officers,  and their related business  interests.  In the opinion of
management,  such loans are  consistent  with sound  banking  practices  and are
within  applicable  regulatory  lending  limitations.  The balance of such loans
outstanding  at December 31, 2000,  1999,  and 1998 totaled  approximately  $1.9
million, $2.7 million and $2.2 million, respectively.

         The Company had also received demand and time deposits of approximately
$14.9  million,  $10.5 million and $18.4 million at December 31, 2000,  1999 and
1998 from directors, officers and their related business interests.

NOTE K -- EMPLOYEE BENEFIT PLANS

         The Company has a profit-sharing and 401(k) plan covering all employees
who have attained the age of twenty-one and completed three months of continuous
service.  The profit-sharing plan is  non-contributory  and contributions to the
plan are at the  discretion of the Board of Directors.  The Company  contributed
$150,000  and  $165,000  to the plan for the years ended  December  31, 2000 and
1998,  respectively.  The  Company did not  contribute  to the plan for the year
ended December 31, 1999.

                                      F-18
<PAGE>

                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998


         The  401(k)  plan  allows  employees  to make  voluntary,  tax-deferred
contributions up to 15% of their base annual compensation. The Company provides,
at its discretion, a 50% matching of funds for each participant's  contribution,
subject to a maximum of 6% of base  compensation.  For 1998, if the  participant
elected to invest their contributions in the common stock of Oak Hill Financial,
Inc., the Company provided a 100% matching of each  participant's  contribution.
The Company's  matching  contributions  under the 401(k) plan totaled  $127,000,
$99,000 and $175,000 for the years ended  December  31,  2000,  1999,  and 1998,
respectively.

         Towne Bank had  established an Employee  Stock  Ownership Plan ("ESOP")
which was to provide retirement benefits for substantially all employees who had
completed six months of service and had attained the age of twenty-one. The ESOP
originally  borrowed $207,000 from an independent  third-party  lender,  payable
over a seven year period,  to purchase stock.  The sole security of the loan was
the  acquired  stock  and,  while  Towne had not  guaranteed  the  loan,  future
contributions  to retire the loan were paid to the ESOP from retained  earnings.
During 1999, the loan was repaid in full.  Towne  recognized  expenses  totaling
$15,000 and $30,000  related to the ESOP for the years ended  December  31, 1999
and 1998, respectively. Towne's ESOP was terminated during 2000.

NOTE L -- COMMITMENTS

         The Company is a party to financial  instruments with off-balance sheet
risk in the  normal  course  of  business  to meet  the  financing  needs of its
customers,  including commitments to extend credit. Such commitments involve, to
varying  degrees,  elements  of credit and  interest-rate  risk in excess of the
amount  recognized  in the  statement  of financial  condition.  The contract or
notional  amounts  of the  commitments  reflect  the  extent  of  the  Company's
involvement in such financial instruments.

         The Company's exposure to credit loss in the event of nonperformance by
the other party to the financial  instrument for commitments to extend credit is
represented by the contractual notional amount of those instruments. The Company
uses the same credit policies in making commitments and conditional  obligations
as those utilized for on-balance-sheet instruments.

         At  December  31,  2000,  the Company had  outstanding  commitments  of
approximately $14.5 million to originate residential and commercial loans. Also,
the  Company  had  unused  lines  of  credit  and  letters  of  credit  totaling
approximately $64.6 million and $1.6 million,  respectively,  as of December 31,
2000. In the opinion of  management,  outstanding  loan  commitments  equaled or
exceeded  prevalent  market  interest  rates  as  of  December  31,  2000,  such
commitments  were  underwritten  in  accordance  with normal  loan  underwriting
policies,  and all  disbursements  will be  funded  via  normal  cash  flow from
operations and existing excess liquidity.

         The Company has also entered into lease  agreements for office premises
and equipment under operating leases which expire at various dates through 2009.
The following table  summarizes  minimum  payments due under lease agreements by
year:

 Year ending
December 31,                               (Dollars in thousands)

       2001                                    $  338
       2002                                       317
       2003                                       225
       2004                                       185
       2005 and thereafter                        391
                                                -----
                                               $1,456
                                                =====

Total rental expense under operating leases was $359,000,  $304,000 and $250,000
for the years ended December 31, 2000, 1999 and 1998, respectively.


                                      F-19
<PAGE>

                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998

NOTE M -- REGULATORY CAPITAL

         Oak Hill and Towne are subject to the regulatory  capital  requirements
of the Federal  Deposit  Insurance  Corporation  (the  "FDIC").  Failure to meet
minimum  capital  requirements  can initiate  certain  mandatory -- and possibly
additional  discretionary  -- actions by regulators  that, if undertaken,  could
have direct material effect on the Banks'  financial  statements.  Under capital
adequacy  guidelines and the regulatory  framework for prompt corrective action,
the Banks  must meet  specific  capital  guidelines  that  involve  quantitative
measures of the Banks' assets, liabilities,  and certain off-balance-sheet items
as calculated under regulatory accounting practices. The Banks' capital accounts
and classifications are also subject to qualitative  judgments by the regulators
about components, risk weightings, and other factors.

         The FDIC has adopted  risk-based  capital guidelines to which the Banks
are subject.  The guidelines  establish a systematic  analytical  framework that
makes  regulatory  capital  requirements  more  sensitive to differences in risk
profiles among banking  organizations.  Risk-based capital ratios are determined
by  allocating  assets  and  specified  off-balance-sheet  commitments  to  four
risk-weighting categories,  with higher levels of capital being required for the
categories perceived as representing greater risk.

         These  guidelines  divide the  capital  into two tiers.  The first tier
("Tier 1") includes common equity,  certain  non-cumulative  perpetual preferred
stock (excluding  auction rate issues) and minority interests in equity accounts
of consolidated subsidiaries,  less goodwill and certain other intangible assets
(except  mortgage  servicing  rights and  purchased  credit card  relationships,
subject to certain  limitations).  Supplementary  ("Tier 2")  capital  includes,
among other items,  cumulative  perpetual and long-term  limited-life  preferred
stock,  mandatory  convertible  securities,  certain hybrid capital instruments,
term  subordinated  debt, and the allowance for loan losses,  subject to certain
limitations,  less required  deductions.  Banks are required to maintain a total
risk-based  capital (the sum of Tier 1 and Tier 2 capital) ratio of 8%, of which
4%  must  be  Tier  1  capital.  The  FDIC  may,  however,  set  higher  capital
requirements  when  particular  circumstances  warrant.  Banks  experiencing  or
anticipating  significant  growth  are  expected  to  maintain  capital  ratios,
including tangible capital positions, well above minimum required levels.

         During the years ended  December  31, 2000 and 1999,  each of the Banks
was  notified  by its  primary  federal  regulator  that it was  categorized  as
"well-capitalized"  under the regulatory framework for prompt corrective action.
To be categorized as  "well-capitalized"  the Banks must maintain minimum Tier 1
capital,  total risk-based  capital,  and Tier 1 leverage ratios of 6%, 10%, and
5%, respectively.  At December 31, 2000, Oak Hill was well-capitalized and Towne
was adequately capitalized.

         As of December 31, 2000 and 1999, management believes that Oak Hill and
Towne  have met all of the  capital  adequacy  requirements  to  which  they are
subject.  The  Banks'  Tier 1  capital,  total  risk-based  capital,  and Tier 1
leverage  ratios at December  31,  2000 and 1999 are set forth in the  following
table.

















                                      F-20
<PAGE>

                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>

Oak Hill Banks                                                  As of December 31, 2000
                                                                                                       To be "well-
                                                                                                    capitalized" under
                                                                    For capital                      prompt corrective
                                      Actual                     adequacy purposes                   action provisions
                                Amount       Ratio              Amount         Ratio                Amount       Ratio
                                                                (Dollars in thousands)
<S>                              <C>          <C>                <C>            <C>                  <C>          <C>
Total capital                  $41,232       10.8%              $30,577        > 8.0%              $38,222      > 10.0%
                                                                               -                                -
(to risk-weighted assets)
Tier 1 capital                 $36,508         9.6%             $15,289        > 4.0%              $22,933       > 6.0%
                                                                               -                                 -
(to risk-weighted assets)
Tier 1 leverage                $36,508         7.7%             $18,893        > 4.0%              $23,616       > 5.0%
                                                                               -                                 -


                                                                As of December 31, 1999
                                                                                                       To be "well-
                                                                                                    capitalized" under
                                                                      For capital                    prompt corrective
                                      Actual                       adequacy purposes                 action provisions
                                Amount       Ratio                Amount       Ratio                Amount       Ratio
                                                                (Dollars in thousands)
Total capital                  $35,855       11.5%               $24,861       > 8.0%              $31,076      > 10.0%
                                                                               -                                -
   (to risk-weighted assets)
Tier 1 capital                 $31,966       10.3%               $12,430       > 4.0%              $18,645       > 6.0%
                                                                               -                                 -
   (to risk-weighted assets)
Tier 1 leverage                $31,966         7.5%              $16,976       > 4.0%              $21,221       > 5.0%
                                                                               -                                 -
</TABLE>


<TABLE>
<CAPTION>
Towne Bank                                                      As of December 31, 2000
                                                                                                       To be "well-
                                                                                                    capitalized" under
                                                                      For capital                    prompt corrective
                                      Actual                       adequacy purposes                 action provisions
                                Amount       Ratio                Amount       Ratio                Amount       Ratio
                                                                (Dollars in thousands)
<S>                              <C>           <C>                 <C>          <C>                  <C>           <C>
Total capital                  $15,299         9.8%              $12,480       > 8.0%              $15,601      > 10.0%
                                                                               -                                -
   (to risk-weighted assets)
Tier 1 capital                 $13,345         8.6%              $ 6,240       > 4.0%              $ 9,360       > 6.0%
                                                                               -                                 -
   (to risk-weighted assets)
Tier 1 leverage                $13,345         6.7%              $ 7,990       > 4.0%              $ 9,988       > 5.0%
                                                                               -                                 -

                                                                As of December 31, 1999
                                                                                                       To be "well-
                                                                                                    capitalized" under
                                                                      For capital                    prompt corrective
                                      Actual                       adequacy purposes                 action provisions
                                Amount       Ratio                Amount       Ratio                Amount       Ratio
                                                                (Dollars in thousands)
Total capital                  $13,630       10.3%               $10,588       > 8.0%              $13,235      > 10.0%
                                                                               -                                -
   (to risk-weighted assets)
Tier 1 capital                 $11,793         8.9%               $5,294       > 4.0%               $7,941       > 6.0%
                                                                               -                                 -
   (to risk-weighted assets)
Tier 1 leverage                $11,793         6.8%               $6,927       > 4.0%               $8,658       > 5.0%
                                                                               -                                 -
</TABLE>

                                      F-21
<PAGE>


                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998


         The Company's  management  believes  that under the current  regulatory
capital  regulations  the Banks  will  continue  to meet their  minimum  capital
requirements in the foreseeable  future.  However,  events beyond the control of
the Company,  such as increased  interest  rates or a downturn in the economy in
the  primary  market  areas,   could   adversely   affect  future  earnings  and
consequently,   the  ability  to  meet   future   minimum   regulatory   capital
requirements.

NOTE N -- STOCK OPTION PLAN

         The Company has a stock option plan that provides for grants of options
for up to 1,200,000 of authorized,  but unissued shares of its common stock. The
Company  accounts  for its stock  option plan in  accordance  with SFAS No. 123,
"Accounting for  Stock-Based  Compensation,"  which contains a fair  value-based
method  for  valuing  stock-based  compensation  that  entities  may use,  which
measures  compensation  cost at the grant  date  based on the fair  value of the
award. Compensation is then recognized over the service period, which is usually
the vesting period. Alternatively,  SFAS No. 123 permits entities to continue to
account for stock  options  and  similar  equity  instruments  under  Accounting
Principles  Board  ("APB")  Opinion  No.  25,  "Accounting  for Stock  Issued to
Employees."  Entities  that  continue  to account  for stock  options  using APB
Opinion No. 25 are  required to make pro forma  disclosures  of net earnings and
earnings per share, as if the fair value-based  method of accounting  defined in
SFAS No. 123 had been applied.

         The Company applies APB Opinion No. 25 and related  Interpretations  in
accounting for its stock option plan. Accordingly, no compensation cost has been
recognized for the plan. Had  compensation  cost for the Company's  stock option
plan been determined based on the fair value at the grant dates for awards under
the plan  consistent  with the accounting  method  utilized in SFAS No. 123, the
Company's net earnings and earnings per share would have been reduced to the pro
forma amounts indicated below:
<TABLE>
<CAPTION>

                                                                                2000           1999            1998
<S>                                          <C>                                <C>            <C>            <C>

Net earnings (In thousands)                As reported                        $6,318         $4,082          $7,040
                                                                               =====          =====           =====

                                             Pro forma                        $6,025         $3,613          $6,758
                                                                               =====          =====           =====

Basic earnings per share                   As reported                         $1.21         $  .77           $1.34
                                                                                ====          =====            ====

                                             Pro forma                         $1.15         $  .68           $1.29
                                                                                ====          =====            ====

Diluted earnings per share                 As reported                         $1.21         $  .76           $1.30
                                                                                ====          =====            ====

                                             Pro forma                         $1.15         $  .67           $1.25
                                                                                ====          =====            ====
</TABLE>


         The fair value of each option granted is estimated on the date of grant
using  the  modified  Black-Scholes  options-pricing  model  with the  following
weighted-average   assumptions   used  for  grants  in  2000,  1999,  and  1998,
respectively:  dividend  yield of 2.5%  for  2000  and  1999 and 4.0% for  1998;
expected  volatility of 10.0% for all years,  risk-free  interest rates of 6.00%
for 2000 and 1999 and 5.50% for 1998, and expected lives of 10 years.

         A  summary  of the  status of the  Company's  Stock  Option  Plan as of
December 31, 2000,  1999 and 1998 and changes  during the periods ended on those
dates is presented below:










                                      F-22
<PAGE>
                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998



<TABLE>
<CAPTION>
                                                      2000                        1999                       1998
                                                           Weighted-                   Weighted-                   Weighted-
                                                            average                     average                     average
                                                           exercise                    exercise                    exercise
                                             Shares          price       Shares          price        Shares         price
<S>                                            <C>           <C>           <C>            <C>           <C>           <C>
Outstanding at beginning of year            625,301        $14.23        542,126        $12.13       438,689        $10.41
Granted                                     137,000         14.75        172,875         16.75       120,750         17.25
Exercised                                   (45,000)         7.42        (83,875)         5.40       (13,188)         6.23
Forfeited                                    (4,000)        16.84         (5,825)        15.97        (4,125)         2.79
                                             -------                      -------                    -------

Outstanding at end of year                  713,301        $14.75        625,301        $14.23       542,126        $12.13
                                            =======         =====        =======         =====       =======         =====

Options exercisable at year-end             644,801                      609,674                     396,025
                                            =======                      =======                     =======
Weighted-average fair value of
   options granted during the year                         $ 3.24                       $ 4.11                      $ 2.27
                                                            =====                        =====                       =====
</TABLE>

         The following  information  applies to options  outstanding at December
31, 2000:

Number outstanding                                                     713,301
Range of exercise prices                                        $2.79 - $18.05
Weighted-average exercise price                                         $14.75
Weighted-average remaining contractual life                          8.0 years



























                                      F-23
<PAGE>
                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998


NOTE O-- OAK HILL FINANCIAL, INC. CONDENSED FINANCIAL INFORMATION

         The following  condensed financial  statements  summarize the financial
position of Oak Hill  Financial,  Inc. as of December 31, 2000 and 1999, and the
results  of its  operations  and its  cash  flows  for each of the  years  ended
December 31, 2000, 1999 and 1998.

                            Oak Hill Financial, Inc.
<TABLE>
<CAPTION>
                   CONDENSED STATEMENTS OF FINANCIAL CONDITION
                                  December 31,
                                 (In thousands)

                                                                                       2000                           1999
ASSETS
<S>                                                                                  <C>                              <C>
Cash and due from banks                                                             $   268                        $    65
Interest-bearing deposits in Oak Hill Banks                                           1,203                          2,161
Investment in Oak Hill Banks                                                         36,432                         30,467
Investment in Action Finance Co.                                                      2,061                          1,975
Investment in Oak Hill Capital Trust I                                                  155                             --
Investment in Towne Bank                                                             13,681                         12,277
Office premises and equipment-- net                                                     936                          1,105
Prepaid expenses and other assets                                                     1,116                            222
                                                                                     ------                         ------

               Total assets                                                         $55,852                        $48,272
                                                                                     ======                         ======

LIABILITIES AND STOCKHOLDERS' EQUITY

Other liabilities                                                                   $   801                        $   548
Junior subordinated debentures                                                        5,155                             --
                                                                                     ------                         ------

                Total liabilities                                                     5,956                            548

Stockholders' equity
    Common stock                                                                      2,707                          2,683
    Additional paid-in capital                                                        5,040                          4,650
    Retained earnings                                                                46,913                         42,724
    Less cost of treasury stock                                                      (4,680)                          (755)
    Unrealized losses on securities designated as
       available for sale, net of related tax effects                                   (84)                        (1,578)
                                                                                     ------                         ------

               Total stockholders' equity                                            49,896                         47,724
                                                                                     ------                         ------

               Total liabilities and stockholders' equity                           $55,852                        $48,272
                                                                                     ======                         ======
</TABLE>









                                      F-24
<PAGE>
                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998


                            Oak Hill Financial, Inc.
<TABLE>
<CAPTION>
                        CONDENSED STATEMENTS OF EARNINGS
                             Year ended December 31,
                                 (In thousands)

                                                                        2000                   1999                   1998
<S>                                                                     <C>                    <C>                    <C>
REVENUE

Interest income                                                       $  166                 $   61                 $   41
Equity in earnings of subsidiaries                                     6,763                  4,498                  7,205
                                                                       -----                  -----                  -----

               Total revenue                                           6,929                  4,559                  7,246

EXPENSES

Interest expense                                                         435                     --                     --
General and administrative                                               405                    574                    292
                                                                       -----                  -----                  -----

               Total expenses                                            840                    574                    292
                                                                       -----                  -----                  -----

               Earnings before federal income
             tax credits                                               6,089                  3,985                  6,954
Federal income tax credits                                              (229)                   (97)                   (86)
                                                                       -----                  -----                  -----


               NET EARNINGS                                           $6,318                 $4,082                 $7,040
                                                                       =====                  =====                  =====
</TABLE>













                                      F-25
<PAGE>


                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999 and 1998


                            Oak Hill Financial, Inc.
<TABLE>
<CAPTION>
                       CONDENSED STATEMENTS OF CASH FLOWS
                             Year ended December 31,
                                 (In thousands)

                                                                        2000                   1999                   1998
<S>                                                                      <C>                   <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings for the year                                             $6,318                 $4,082                 $7,040
Adjustments to reconcile net earnings to net
cash provided by (used in) operating activities:
   Undistributed earnings of consolidated subsidiaries                                       (5,900)                (1,176)
(3,531)
   Depreciation of office premises and equipment                         205                    --                      --
   Increase (decrease) in cash due to changes in:
      Prepaid expenses and other assets                                 (955)                (1,210)                     7
      Other liabilities                                                  253                    155                    112
                                                                       -----                  -----                  -----

         Net cash provided by (used in) operating activities             (79)                 1,851                  3,628

CASH FLOWS FROM INVESTING ACTIVITIES:

Investment in Action Finance Company                                     --                     --                  (2,000)
Investment in Oak Hill Capital Trust I                                  (155)                   --                      --
Purchase of office premises and equipment                                (36)                   --                      --
(Increase) decrease in interest-bearing deposits                         958                   (589)                  (568)
                                                                       -----                  -----                  -----

         Net cash provided by (used in) investing activities             767                   (589)                (2,568)
                                                                       -----                  -----                  -----

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of notes payable                                1,600                    --                      --
Repayment of notes payable                                            (1,600)                   --                      --
Proceeds from exercise of stock options                                  414                    567                    114
Proceeds from issuance of debt securities                              5,155                    --                      --
Purchase of treasury stock                                            (3,925)                   --                    (727)
Dividends on common shares                                            (2,129)                (1,792)                (1,385)
                                                                       -----                  -----                  -----

         Net cash used in financing activities                          (485)                (1,225)                (1,998)
                                                                       -----                  -----                  -----

Net increase (decrease) in cash and cash equivalents                     203                     37                   (938)

Cash and cash equivalents at beginning of year                            65                     28                    966
                                                                       -----                  -----                  -----

Cash and cash equivalents at end of year                              $  268                 $   65                 $   28
                                                                       =====                  =====                  =====
</TABLE>

                                      F-26
<PAGE>



                            Oak Hill Financial, Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              For the years ended December 31, 2000, 1999, and 1998


NOTE P -- SECURITIES SOLD UNDER AGREEMENT TO REPURCHASE

Obligations   for   securities   sold  under   agreements  to  repurchase   were
collateralized  at December 31, 2000 and 1999 by  investment  securities  with a
book value including  accrued  interest of  approximately  $3.0 million and $3.1
million and a market  value of  approximately  $3.0  million  and $3.1  million,
respectively.  The maximum balance of repurchase  agreements  outstanding at any
month-end  during the years ended  December  31, 2000 and 1999 was  $479,000 and
$1.9 million,  respectively,  and the average month-end balance  outstanding for
2000 and 1999 was approximately $392,000 and $934,000, respectively.

NOTE Q -- QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

         The following table summarizes the Company's  quarterly results for the
years ended December 31, 2000 and 1999.
<TABLE>
<CAPTION>

                                                                            Three Months Ended
                                                  March 31,             June 30,         September 30,        December 31,
2000:                                                                (In thousands, except per share data)
<S>                                                  <C>                 <C>                   <C>                 <C>
Total interest income                              $12,402              $13,146              $14,123              $14,907
Total interest expense                               6,242                6,910                7,896                8,462
                                                    ------               ------               ------               ------

Net interest income                                  6,160                6,236                6,227                6,445
Provision for losses on loans                          360                  498                  708                  697
Other income                                           621                  647                  669                  381
General, administrative and other expense            3,771                3,668                3,892                4,302
                                                    ------               ------               ------               ------
Earnings before income taxes                         2,650                2,717                2,296                1,827
Federal income taxes                                   885                  911                  766                  610
                                                    ------               ------               ------               ------

Net earnings                                       $ 1,765              $ 1,806              $ 1,530               $1,217
                                                    ======               ======               ======                =====

Basic earnings per share                              $.33                 $.34                 $.30                 $.24
                                                       ===                  ===                  ===                  ===
Diluted earnings per share                            $.33                 $.34                 $.30                 $.24
                                                       ===                  ===                  ===                  ===
</TABLE>

<TABLE>
<CAPTION>
                                                                           Three Months Ended
                                                  March 31,             June 30,         September 30,           December 31,
1999:                                                                (In thousands, except per share data)
<S>                                                  <C>                   <C>                 <C>                  <C>
Total interest income                              $10,818              $10,855              $11,742              $11,835
Total interest expense                               5,425                5,264                5,672                6,058
                                                    ------               ------               ------               ------

Net interest income                                  5,393                5,591                6,070                5,777
Provision for losses on loans                          310                  409                1,175                  538
Other income (loss)                                    768                  686              (1,589)                  543
General, administrative and other expense            3,150                3,186                4,219                4,087
                                                    ------               ------               ------               ------
Earnings (loss) before income taxes (credits)        2,701                2,682                (913)                1,695
Federal income taxes (credits)                         886                  878                (320)                  639
                                                    ------               ------               -----                ------

Net earnings (loss)                                $ 1,815              $ 1,804             $  (593)              $ 1,056
                                                    ======               ======              =======               ======

Basic earnings (loss) per share                       $.34                 $.34               $(.11)                 $.20
                                                       ===                  ===                 ====                  ===
Diluted earnings (loss) per share                     $.34                 $.33               $(.11)                 $.20
                                                       ===                  ===                 ====                  ===
</TABLE>

                                      F-27
<PAGE>


REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS













Board of Directors
Oak Hill Financial, Inc.

         We have audited the accompanying  consolidated  statements of financial
condition of Oak Hill  Financial,  Inc. as of December 31, 2000 and 1999 and the
related consolidated statements of earnings, stockholders' equity, comprehensive
income  and cash  flows  for each of the years in the three  year  period  ended
December  31,   2000.   These   consolidated   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards  require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material  respects,  the consolidated  financial  position of Oak
Hill  Financial,  Inc. as of December  31, 2000 and 1999,  and the  consolidated
results of its  operations and its cash flows for each of the years in the three
year period ended December 31, 2000, in conformity  with  accounting  principles
generally accepted in the United States of America.



/s/ Grant Thornton LLP


Cincinnati, Ohio
February 8, 2001












                                      F-28